Colombo (AFP) - Cash-strapped Sri Lanka on Sunday announced sending ministers to Russia and Qatar to try and secure cheap oil a day after the government said it had all but run out of fuel.
The government meanwhile extended a two-week closure of non-essential state institutions until further notice in order to save fuel, maintaining only a skeleton staff to provide minimum services.
Energy Minister Kanchana Wijesekera said two ministers will travel to Russia on Monday to discuss getting more oil following last month's purchase of 90,000 tonnes of Siberian crude.
That shipment was arranged through Coral Energy, a Dubai-based intermediary, but politicians have been urging the authorities to negotiate directly with President Vladimir Putin's government.
"Two ministers are going to Russia and I will go to Qatar tomorrow to see if we can arrange concessionary terms," Wijesekera told reporters in Colombo.
Wijesekera had announced on Saturday that Sri Lanka was virtually out of petrol and diesel after several scheduled shipments were delayed indefinitely due to "banking" reasons.
Fuel reserves were sufficient to meet less than two days' demand and it was being reserved for essential services, Wijesekera said while apologising for the situation.
The state-run Ceylon Petroleum Corporation on Sunday hiked the price for diesel by 15 percent to 460 rupees ($1.27) a litre and petrol by 22 percent to 550 rupees.
Since the beginning of the year, diesel prices have gone up nearly four-fold and gasoline has almost tripled.
Wijesekera said there would be an indefinite delay in getting new shipments of oil and urged motorists not to queue up until he introduces a token system to a limited number of vehicles daily.
US takes stock
A delegation from the US Treasury and the State Department meanwhile arrived to "explore the most effective ways for the US to support Sri Lankans in need", the US embassy in Colombo said.
"As Sri Lankans endure some of the greatest economic challenges in their history, our efforts to support economic growth and strengthen democratic institutions have never been more critical," US ambassador Julie Chung said in a statement.
US Deputy Assistant Secretary of Treasury for Asia Robert Kaproth and Deputy Assistant Secretary of State for South and Central Asia Kelly Keiderling were in the delegation.
The embassy said it had committed $158.75 million in new financing in the past two weeks to help Sri Lankans.
About 1.7 million residents need "life-saving assistance", according to the United Nations which issued a flash appeal last week.
Four out of five people in the nation of 22 million have reduced their food intake due to severe shortages and galloping prices, the UN noted.
Prime Minister Ranil Wickremesinghe warned parliament on Wednesday that more hardships were on the way.
"Our economy has faced a complete collapse," Wickremesinghe said. "We are now facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food."
Unable to repay its $51 billion foreign debt, the government declared it was defaulting in April and is negotiating with the International Monetary Fund for a possible bailout.
Sri Lanka's official inflation at the end of May was 45.3 percent, according to official data, but private economists have placed it at 128 percent, the second-highest in the world after Zimbabwe.
