President Anura Kumara Dissanayake has affirmed that Sri Lanka is currently navigating a severe US Dollar crisis but assured the nation that it will not face an economic crisis similar to the one experienced in 2022. Speaking at various events, including the Nuwara Eliya District Special Coordinating Committee, the "Ratama Ekata" programme in Batticaloa, and an event in Ampara, the President emphasized that the government possesses the strength to manage the current challenges, which are partly attributed to the ongoing Middle East conflict.
The President detailed that the global price of diesel has surged to approximately Rs. 720 per litre, largely influenced by the Middle East conflicts. Despite this, diesel is currently sold to the public at Rs. 392 per litre, with the government providing a Rs. 100 subsidy per litre. This practice, where the Ceylon Petroleum Corporation (CPC) effectively receives Rs. 492 per litre, is leading to heavy losses for the Ceylon Petroleum Corporation (CPC) and is deemed unsustainable in the long run. The nation's oil import bill saw a six-fold rise between February and May, with USD 522 million spent on fuel imports for May alone, placing significant pressure on the Sri Lankan Rupee.
President Dissanayake attributed the broader dollar crisis to several factors, including a temporary decrease in tourist arrivals and a decline in export earnings, both exacerbated by the Middle East conflict. He acknowledged that the strengthening US Dollar directly impacts the Sri Lankan Rupee but assured that the depreciation of the Rupee will be short-term.
To mitigate the crisis and control the outflow of foreign exchange, the government has implemented several measures:
* A primary goal to limit fuel consumption.
* Retention of QR-based distribution for fuel.
* A temporary halt on government vehicle purchases.
* Active engagement with the International Monetary Fund (IMF), having discussed and submitted proposals.
* Broader strategies including curbing imports, and cutting overall expenditure.
The President appealed to all citizens to individually contribute to reducing the outflow of dollars by limiting fuel and imports. He reiterated that a destructive economic situation would not be allowed to occur. Amidst these economic discussions, President Dissanayake also announced that public servant salaries will be increased in January.