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| Sri Lanka petrol: Why is the country in an economic crisis? | Sri Lanka petrol: Why is the country in an economic crisis? |
| (2 days later) | |
| Sri Lanka's government says the country has only enough petrol to last one day under regular demand and that it does not have enough foreign currency to import more. | |
| Sri Lanka has had to impose a ban on sales of petrol and diesel for private vehicles as it faces its worst economic crisis in 70 years. | |
| The government is in talks with the International Monetary Fund (IMF) to get a $3bn (£2.5bn) bailout. | |
| Why have fuel sales been suspended? | Why have fuel sales been suspended? |
| Sri Lanka doesn't have enough foreign currency to pay for imports, including petrol and diesel. | Sri Lanka doesn't have enough foreign currency to pay for imports, including petrol and diesel. |
| So, it is halting sales of fuel to ordinary people until 10 July. It's thought to be the first country to do so since the 1970s. | So, it is halting sales of fuel to ordinary people until 10 July. It's thought to be the first country to do so since the 1970s. |
| At the weekend, officials said it had less than a week's worth of fuel left for essential services like buses, trains and medical vehicles. | At the weekend, officials said it had less than a week's worth of fuel left for essential services like buses, trains and medical vehicles. |
| Schools have closed and the country's 22 million residents have been asked to work from home. | Schools have closed and the country's 22 million residents have been asked to work from home. |
| Sri Lanka's suffering was avoidable - bank boss | Sri Lanka's suffering was avoidable - bank boss |
| How else have people been affected? | How else have people been affected? |
| Shortages of food and fuel have caused prices to soar. Inflation is now running at 30%. | Shortages of food and fuel have caused prices to soar. Inflation is now running at 30%. |
| There have been power cuts, and the lack of medicines has brought the health system to the verge of collapse. | There have been power cuts, and the lack of medicines has brought the health system to the verge of collapse. |
| Protests have spread across the island in recent months. | Protests have spread across the island in recent months. |
| Why is Sri Lanka's economy in crisis? | Why is Sri Lanka's economy in crisis? |
| Sri Lanka's foreign currency reserves have virtually run dry. | Sri Lanka's foreign currency reserves have virtually run dry. |
| In May it failed to make a payment on its foreign debt for the first time in its history. | |
| The government blames the Covid pandemic, which affected Sri Lanka's tourist trade - one of its biggest foreign currency earners. It also says tourists have been frightened off by a series of deadly bomb attacks on churches in 2019. | The government blames the Covid pandemic, which affected Sri Lanka's tourist trade - one of its biggest foreign currency earners. It also says tourists have been frightened off by a series of deadly bomb attacks on churches in 2019. |
| However, many experts say economic mismanagement is to blame. | However, many experts say economic mismanagement is to blame. |
| How Sri Lanka's war heroes became villains | How Sri Lanka's war heroes became villains |
| At the end of its civil war in 2009, Sri Lanka chose to focus more on providing goods to the domestic market, instead of trying to break into foreign ones. So income from exports remained low, while the bill for imports kept growing. | At the end of its civil war in 2009, Sri Lanka chose to focus more on providing goods to the domestic market, instead of trying to break into foreign ones. So income from exports remained low, while the bill for imports kept growing. |
| Sri Lanka now imports $3bn (£2.3bn) more than it exports every year, and that is why it has run out of foreign currency. | Sri Lanka now imports $3bn (£2.3bn) more than it exports every year, and that is why it has run out of foreign currency. |
| The cost of living has skyrocketed in Sri Lanka, with food costing up to 30% more than a year earlier | The cost of living has skyrocketed in Sri Lanka, with food costing up to 30% more than a year earlier |
| At the end of 2019, Sri Lanka had $7.6bn (£5.8bn) in foreign currency reserves. | At the end of 2019, Sri Lanka had $7.6bn (£5.8bn) in foreign currency reserves. |
| By March 2020 this had fallen to $1.93bn (£1.5bn) and recently the government said it had just $50m (£40.5m) left. | By March 2020 this had fallen to $1.93bn (£1.5bn) and recently the government said it had just $50m (£40.5m) left. |
| The government has also racked up huge debts with countries including China, to fund what critics have called unnecessary infrastructure projects. | The government has also racked up huge debts with countries including China, to fund what critics have called unnecessary infrastructure projects. |
| This video can not be played | This video can not be played |
| To play this video you need to enable JavaScript in your browser. | To play this video you need to enable JavaScript in your browser. |
| WATCH: Police in Sri Lanka fire tear gas and water cannon at protesters in Kandy | WATCH: Police in Sri Lanka fire tear gas and water cannon at protesters in Kandy |
| Much of the popular anger for the economic crisis has been directed at President Gotabaya Rajapaksa and his brother, Mahinda, who he appointed to be prime minister, but dismissed in May. | Much of the popular anger for the economic crisis has been directed at President Gotabaya Rajapaksa and his brother, Mahinda, who he appointed to be prime minister, but dismissed in May. |
| President Rajapaksa has been criticised for big tax cuts he introduced in 2019. Finance Minister Ali Sabry has said these lost the government income of more than $1.4bn (£1.13bn) a year. | President Rajapaksa has been criticised for big tax cuts he introduced in 2019. Finance Minister Ali Sabry has said these lost the government income of more than $1.4bn (£1.13bn) a year. |
| When Sri Lanka's foreign currency shortages became a serious problem in early 2021, the government tried to limit them by banning imports of chemical fertiliser. | When Sri Lanka's foreign currency shortages became a serious problem in early 2021, the government tried to limit them by banning imports of chemical fertiliser. |
| It told farmers to use locally sourced organic fertilisers instead. | It told farmers to use locally sourced organic fertilisers instead. |
| This led to widespread crop failure. Sri Lanka had to supplement its food stocks from abroad, which made its foreign currency shortage even worse. | This led to widespread crop failure. Sri Lanka had to supplement its food stocks from abroad, which made its foreign currency shortage even worse. |
| An IMF report in March this year said the fertiliser ban (reversed in November 2021) also hurt tea and rubber exports, leading to "potentially substantial" losses. | An IMF report in March this year said the fertiliser ban (reversed in November 2021) also hurt tea and rubber exports, leading to "potentially substantial" losses. |
| The switch to organic fertilisers resulted in widespread crop failure, exacerbating foreign currency shortages | The switch to organic fertilisers resulted in widespread crop failure, exacerbating foreign currency shortages |
| Does the government have a plan to solve the crisis? | Does the government have a plan to solve the crisis? |
| Prime Minister Ranil Wickremesinghe has said the government is now so short of funds that it will be printing money to pay employees' salaries. | Prime Minister Ranil Wickremesinghe has said the government is now so short of funds that it will be printing money to pay employees' salaries. |
| He warns this will lead to further price hikes, with inflation rising to 40%. | He warns this will lead to further price hikes, with inflation rising to 40%. |
| He also says state-owned Sri Lankan Airlines could be privatised. | He also says state-owned Sri Lankan Airlines could be privatised. |
| Sri Lanka is also asking Russia and Qatar to supply it with oil at low prices. | |
| How much foreign debt must Sri Lanka repay? | How much foreign debt must Sri Lanka repay? |
| Sri Lanka's government has racked up $51bn (£39bn) in foreign debt. | Sri Lanka's government has racked up $51bn (£39bn) in foreign debt. |
| This year, it will be required to pay $7bn (£5.4bn) to service these debts, with similar amounts for years to come. The government is seeking emergency bridging loans of $3bn from the International Monetary Fund (IMF) so it can pay. | This year, it will be required to pay $7bn (£5.4bn) to service these debts, with similar amounts for years to come. The government is seeking emergency bridging loans of $3bn from the International Monetary Fund (IMF) so it can pay. |
| The IMF has said the government must raise interest rates and taxes as a condition of any loan. | The IMF has said the government must raise interest rates and taxes as a condition of any loan. |
| The World Bank has agreed to lend Sri Lanka $600m. | The World Bank has agreed to lend Sri Lanka $600m. |
| India has committed $1.9bn and may lend an additional $1.5bn for imports. | India has committed $1.9bn and may lend an additional $1.5bn for imports. |
| The G7 group of leading industrial countries - Canada, France, Germany, Italy, Japan, UK and the US - have said they will provide help to Sri Lanka in securing debt relief. | The G7 group of leading industrial countries - Canada, France, Germany, Italy, Japan, UK and the US - have said they will provide help to Sri Lanka in securing debt relief. |
| Sri Lanka owes $6.5bn to China and the two are in talks on how to restructure the debt. | Sri Lanka owes $6.5bn to China and the two are in talks on how to restructure the debt. |