Sri Lankan government has allowed private companies to import fuel, Power and Energy Minister Kanchana Wijesekera said on Friday, a move aimed at easing the burden on cash-strapped state-run fuel retailer Ceylon Petroleum Corporation (CPC).

The severe depreciation of the Sri Lankan rupee against the US dollar, and the soaring global prices of crude following the ongoing conflict in Ukraine were some of the reasons why the state-owned entity has been struggling to import fuel.

Approval was given to all the Private Bunker Fuel Operators to import and provide diesel and fuel oil requirements of industries to function their generators and machinery, Wijesekera said in a tweet. This will ease the burden on CPC and fuel stations providing in bulk. The meeting was held yesterday, he added.

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In April, the Sri Lankan Cabinet agreed to amend the Petroleum Products Act making provisions to issue licenses to properly identified parties to import fuel which will end an import monopoly held by the CPC, according to the online business and political news portal EconomyNext.

The Sri Lankan government on Tuesday raised the petrol price by 24.3 percent and diesel by 38.4 percent, a record hike in fuel prices amid the country’s worst economic crisis due to the shortage of foreign exchange reserves.

With the second fuel price hike since April 19, now the most-used Octane 92 petrol would cost 420 rupees (USD 1.17) and diesel 400 rupees (USD 1.11) a litre, an all-time high. The decision to raise the Octane 92 petrol price by 24.3 percent or 82 rupees and diesel by 38.4 percent or 111 rupees per litre was taken by the CPC.

Sri Lanka has also hired France-based financial and legal advisory firms Lazard and Clifford Chance LLP to support its debt restructuring as the country is on the brink of bankruptcy. A crippling shortage of foreign reserves has led to long queues for fuel, cooking gas and other essentials while power cuts and soaring food prices heaped misery on the people.

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On Thursday, Sri Lankan Prime Minister Ranil Wickremesinghe met the chairmen and top management of all state and private banks in the country and inquired from them about issues such as dollar deficit and credit expansion, as well as the amount of savings, media reports said. Sri Lanka has been going through the worst economic crisis since its independence from Britain in 1948, triggering a political crisis as well.

The nearly bankrupt country, with an acute foreign currency crisis that resulted in foreign debt default, announced last month that it is suspending nearly USD 7 billion foreign debt repayment due for this year out of about USD 25 billion due through 2026. Sri Lanka’s total foreign debt stands at USD 51 billion.

The financial crisis has prompted an acute shortage of essential items like food, medicine, cooking gas and other fuel, toilet paper, and even matches, with Sri Lankans for months being forced to wait in lines lasting hours outside stores to buy fuel and cooking gas. Protesters have occupied the entrance to President Gotabaya Rajapaksa’s office for nearly 50 days now, demanding his resignation.

The president’s brother and former prime minister Mahinda Rajapaksa resigned earlier this month following countrywide violence when his supporters attacked peaceful protesters.

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(Edited by : Anand Singha)