Sri Lanka sinks into chaos – Russia supplies urgently needed crude oil

RIO DE JANEIRO, BRAZIL – Government mismanagement, corruption, nepotism, and the critical global economic situation resulting from the Covid lockdowns and the consequences of Western sanctions against Russia for its invasion of Ukraine have plunged the island nation of Sri Lanka into chaos.

But while people from Washington to London to Brussels bemoan the “humanitarian crisis” in Ukraine and squander untold billions of taxpayer dollars, millions of people in Sri Lanka are suffering from rapidly deteriorating economic conditions.

The country’s gas stations have virtually run out of fuel, supermarkets have mainly been emptied, and pharmacies and hospitals lack vital medicines. The country is on the verge of collapse, and the citizens are now unloading their widespread anger on the politicians.

https://twitter.com/RadioGenova/status/1529769256782544898

But while the West stands idly by and watches the collapse of the South Asian island nation, Russia and China seem to be taking up the cause and providing at least a little relief.

Bloomberg reports that Ceylon Petroleum Corp, the country’s only refiner, will begin shipping Russian grade Siberian Light on May 28. This will be the first time in two months that the refinery will process crude oil into high-value products such as gasoline and diesel.

Sri Lanka is looking to fast-track talks with the IMF and agree a loan by mid-June https://t.co/m2YVV4XDCn

— Bloomberg (@business) May 25, 2022

Fuel supplies in the island nation are so low that the government has asked citizens to stop waiting in long lines at gas stations. The government has run out of foreign currency reserves to pay for key imports.

Bloomberg was not quite sure how Sri Lanka paid for Russian crude, as the country has more than US$50 billion in foreign debt. The government is seeking a US$4 billion loan from the IMF and has asked China to renegotiate at least US$3.5 billion.

Sapugaskanda Refinery will commence operations for first time since March 20th with a Crude Oil cargo unloading tomo. The refinery will start producing Fuel Oil in 6 days. Stocks on 26 May –
Diesel 23022 MT, Sup Diesel 2588 MT, 92 Pet 39968 MT, 95 Pet 7112 MT and JETA1 3578 MT

— Kanchana Wijesekera (@kanchana_wij) May 26, 2022

According to the Financial Times, Beijing has also recently offered a few hundred million dollars in loans to help alleviate shortages of essential goods.

But Russia and China’s support does not seem to have gone unnoticed. As Sri Lanka’s Prime Minister-designate Ranil Wickremesinghe wrote on Twitter, “Quad” members India and Japan now appear to be working with the anti-China alliance (including the United States and Australia) on an aid package for the country.

1. Assistance from India and Japan: I am grateful for the positive response from India and Japan on the proposal made for the Quad members (United States, India, Japan, and Australia) to take the lead in setting up a foreign aid consortium to assist Sri Lanka.

— Ranil Wickremesinghe (@RW_SRILANKA) May 27, 2022

It now remains to be seen whether the situation in Sri Lanka will stabilize at least somewhat in the coming weeks and months.