Ceylon Petroleum Corporation (CPC), Sri Lanka’s state run petroleum company, has run out of cash for oil as the island grapples with a fuel shortage.
According to Minister of Energy, Udaya Gammapila, CPC suffered losses of up to 42 percent on the sale of diesel at government-mandated prices.
"Earlier, we were short of dollars to import oil. Now we don't have the rupees to buy the dollars," Gammapila reportedly said.
"Even if taxes are lifted on oil sales, it is not enough to cover our losses," he added.
"A severe shortage is inevitable unless we increase prices or the treasury offers a bailout."
Earlier this week, India delivered 40,000 metric tonnes of fuel to Sri Lanka to help ease the fuel shortage aftert Finance Minister Basil Rajapaksa visited India at the end of last year to seek financial assistance in the midst of the crisis.
Alongside the fuel shortage, Sri Lanka is also facing a shortage of medicine and food. The Food and Agriculture Organisation of the UN reported that prices of staple foods have reached a record high as the Sri Lankan rupee continues to depreciate. As a result, the high prices have restricted vulnerable households' access to food.