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September 30, 2023

Kerosene Oil Sells at Rs 1,800 Rupees Per Litre on The Black Market in Sri Lanka

A group of around a dozen fishermen was setting up their nets on a beach in Mannar, a small island off the northwest coast of Sri Lanka, as the sun rose over the country one morning in late August.

However, due to the crippling economic crisis that the nation is currently experiencing—the worst it has seen since gaining independence in 1948—many other local fishermen are completely unable to venture out to sea.

They are finding it difficult to obtain the kerosene oil necessary to power the boats that support their way of life because of fuel shortages and rogue inflation.
Soosaipillai Nicholas, 73, also known as Sornam, said, “Everything’s difficult right now – there’s no kerosene, there’s no food at home.”

Sornam, who was already in need of food before the economic crisis hit, has grown too old to go fishing. Instead, he came to the Thalvapadu beach to assist in gathering and sorting the catch from the fishermen who do manage to venture out.

There are now 40 workers per boat instead of the previous 15 due to the lack of kerosene, which has caused other people who would typically go out in their own boats to take up the same work.

Since profits are split, Sornam’s earnings have decreased; according to him, he now only occasionally receives 250 Sri Lankan rupees (about 70 cents) each day, down from around twice that amount during more prosperous times.

With food inflation at about 94% and current inflation at about 65% year over year, that doesn’t go very far.
Since Mannar’s foreign exchange reserves ran out and it was unable to acquire crude for its refineries, there was no kerosene at all to be found there for months. Kerosene prices were approximately four times higher when supplies first restarted just a few weeks ago because Sri Lanka had started eliminating fuel subsidies.

Kerosene is being sold at the government cost of 340 rupees per litre, or $3.62 per gallon, compared to its prior subsidized price of 87 rupees per litre, or roughly 92 U.S. cents per gallon. A boat owner claimed that it costs 1,800 rupees per litre on the black market.

Kanchana Wijesekera, Sri Lanka’s minister of electricity and energy, stated in a tweet last month that “kerosene price revision was a requirement for many years.” The government has recommended a direct financial subsidy to low-income people, fisheries, and plantation industries that depend on kerosene because prices are now equal to costs.

However, according to the people there, no handouts have yet been given to families in Mannar.

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