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Prime Minister’s special statement

Prime Minister Ranil Wickremesinghe’s special statement addressing the nation commenced, a short while ago.

He stated that last Thursday, he had accepted the Premiership of Sri Lanka and that it was not what he had asked for.

“I did not ask for that position. In the face of the crisis situation in the country, the President invited me to accept this position. At this moment, Sri Lanka’s economy is at a very dangerous position.” he said.

He added that a decision was taken by the Cabinet of Ministers yesterday to table a proposal in parliament to increase the approved issuance limit of treasury bills from 3,000 billion to 4,000 billion.

Wickremesinghe further added that Sri Lanka’s foreign exchange reserves were USD 7.5 billion in November 2019, however today the treasury is unable to find even one million US dollars.

“Amidst all these issues we are faced with several grave concerns. To ease the queues, we must obtain approximately USD 75 million within the next couple of days. At the moment, we only have petrol stocks for a single day. Due to the diesel shipment that arrived yesterday, the diesel lack of diesel will be resolved to some extent. Under the Indian credit line, two more diesel shipments are due to arrive on the 18th May and 1st June. In addition, two petrol shipments are expected on 18th and 29th May. For over 40 days 3 ships with crude oil and furnace oil have been anchored within the maritime zone of Sri Lanka. We are working to obtain dollars in the open market to pay for these shipments,” said the Prime Minister.

PM Wickremesinghe further added that due to the current crisis in the country, power cuts of up to 15 hours a day would have to be faced by the nation.

“A quarter of electricity is generated through oil. Therefore, there is a possibility that the daily power outages will increase to 15 hours a day. However, we have already obtained money to avert this crisis. We must also immediately obtain USD 20 million to provide gas to consumers. The situation of kerosene and furnace oil is even more urgent. At present, the Central Bank, local state and private banks, and foreign banks functioning in Sri Lanka are all facing a dollar shortage. As you are already aware, we possess a very low amount of US dollars. Nevertheless, we succeeded in bringing in a diesel shipment yesterday despite these adverse circumstances with Indian assistance. Therefore, you can obtain that diesel from today onwards. We will also work towards making a payment for the gas shipment that arrived on Tuesday. Therefore, you will have some respite from the gas shortage,” said Wickremesinghe.

Prime Minister Wickremesinghe further revealed at payments to medicine suppliers have not been made for the last 4 months, and that payments amounting to SLR 34 billion is needed to obtain medicine and supplies.

“Another grave concern is the lack of medicine. There is a severe shortage of a number of medicines including medicine required for heart disease as well as surgical equipment. Payments have not been made for four months to suppliers of medicine, medical equipment, and food for patients. The payment owed to them amounts to SLR 34 billion. In addition, payments have not been made for four months for medicine imported by the State Pharmaceuticals Corporation. As a result, pharmaceutical companies are taking steps to blacklist the SPC. Unfortunately, our Medical Supplies Division is unable to provide even two critical items of the 14 essential medicines that we currently need. These two are a medicine used in treating heart disease and the anti-rabies vaccine. The latter has no alternative treatment,” the Premier mentioned.

He further mentioned that due to the losses incurred by the national carrier, SriLankan Airlines, the Prime Minister suggested privatisation of the airline.

“I further propose to privatise Sri Lankan Airlines which is incurring extensive losses. The loss for the year 2020-2021 alone amounts to SLR 45 billion. By 31st March 2021, the total loss was at 372 billion. Even if we privatise Sri Lankan Airlines, this is a loss that we must bear. You must be aware that this is a loss that must be borne even by the poor people of this country who have never stepped on an airplane,” he further mentioned.

The Prime Minister further added that the country would have to face an even more difficult time period and there was a possibility that inflation will increase further.

“At present, the government incurs a loss of SLR 84.38 per liter of 92 octane petrol, 71.19 per liter of 95 octane petrol, 131.55 per liter of diesel, 136.31 per liter of super diesel, and 294.50 per liter of kerosene oil. The Petroleum Corporation can no longer bear this loss. Similarly, although the Electricity Board charges SLR 17 per unit of electricity the cost of production is at around SLR 48 amounting to a loss of about SLR 30 per unit. This is also a serious problem. Against my own wishes, I am compelled to permit printing money in order to pay state-sector employees and to pay for essential goods and services. However, we must remember that printing money leads to the depreciation of the rupee. Under the current circumstances, even the Petroleum Corporation and the Electricity Board are unable to obtain rupees,” he mentioned.

In conclusion, Wickremesinghe mentioned that the next couple of months would be difficult for the people of Sri Lanka and that sacrifices would have to be made by everyone and face the challenges.

“I have no desire to hide the truth and to lie to the public. Although these facts are unpleasant and terrifying, this is the true situation. For a short period, our future will be even more difficult than the tough times that we have passed. We will face considerable challenges and adversity. However, this period will not be long. In the coming months, our foreign allies will assist us. They have already pledged their support. Therefore, we will have to patiently bear the next couple of months. However, we can overcome this situation. Doing so will require taking a new path. We must immediately establish a national assembly or political body with the participation of all political parties to find solutions for the present crisis. This will enable us to discuss with all parties and to arrive at decisions for short-, medium-, and long-term action plans that will enable us to rebuild our nation within a specified time frame,” Wickremesinghe concluded.