Sri Lanka runs out of diesel, faces longest-ever blackout

Diesel was no longer on sale across Sri Lanka on Thursday, crippling transport as the crisis-hit country's 22 million people endure record-long power blackouts.

The South Asian nation is amid its worst economic downturn since independence, sparked by an acute lack of foreign currency to pay for even the most essential imports.

Diesel -- the main fuel for buses and commercial vehicles -- was unavailable at stations across the island, according to officials and media reports.

Petrol was on sale but in short supply, forcing motorists to abandon their cars in long queues.

"We are siphoning off fuel from buses that are in the garage for repairs and using that diesel to operate serviceable vehicles," Transport Minister Dilum Amunugama said.

Sri Lanka, a country of 22 million people is in its worst economic crisis since independence in 1948, because of a severe shortage of foreign currency to pay for imports.

Foreign exchange reserves have fallen by 70% in the past two years and were down to a paltry $2.31 billion as of February, leaving Sri lanka struggling to import essentials, including food and fuel.

Janaka Ratnayake, Chairman of the Public Utilities Commission of Sri Lanka, said the drawn-out power cuts were partly a result of the government’s inability to pay $52 million for a 37,000 tonne diesel shipment that is awaiting offloading.

“We have no forex to pay,” Ratnayake told Reuters. “That is the reality.”

Electricity generation has also been hit by low water levels at hydropower facilities during the ongoing dry season, Sri Lanka’s power ministry said. Some water at hydro-power reservoirs is being held back for irrigation ahead of the new cropping reason and domestic use, the ministry said.

To seek a way out of the crisis, Finance Minister Basil Rajapaksa will go to Washington in April for talks with the IMF, sources with knowledge of the ongoing discussions told Reuters.

An IMF assesment published on Friday said Sri Lanka was experiencing a combined balance of payments and sovereign debt crisis, and would need a “comprehensive strategy” to make its debt sustainable.

If Sri lanka secures an IMF programme it would be its 17th financial rescue package from the global lender.