Fuel Crisis: A double burden for low-income residents in Colombo, Sri Lanka

By Mohideen M. Alikhan and Sakeena Alikhan - 07.05.2022

People stand in a queue to buy kerosene oil in Colombo. ISHARA S. KODIKARA/AFP via GETTY IMAGES

Sri Lanka has been thrust into history due to the fuel crisis. Since August 2021, the insufficient supply of liquefied petroleum gas (LPG), petrol, and diesel, as well as price increases, have a significant impact on all Sri Lankans' daily lives, especially among the poor. Due to a lack of foreign reserves, the Sri Lankan government has been experiencing a serious economic crisis. Sri Lanka rupees depreciated against US dollar by 26 percent from January to March 2022.

The depreciation of its currency versus the US dollar has increased the price of essential goods, such as fuel. The price of a 12.5 kg LPG cylinder was 1,493/- rupees in September 2021, and it was increased to 2,675/- rupees in October 2021. In April 27 2022, again the price of 12.5 kg cylinder it increased to 4,860/-.

In June 2021, the price of a litre of petrol (92 octane) was 137 rupees, which was increased multiple times, and in April 2022, the price of a litre of petrol is 338 rupees. In December 2021, the price of kerosene increased by ten rupees per litre.

Along with fuel price hikes, petrol, diesel, and LPG (Liquefied Petroleum Gas) faces supply shortages occurring in recent months. Furthermore, power outages have become regular throughout the country as a result of fuel shortages and the reliance on fuel generated power. Further, many cities are experiencing chaos owing to a lack of fuel for both cooking and transportation. Although this is a problem that affects the entire island, low-income residents in Colombo are particularly vulnerable.

Why it is double burden for low income residents?

According to the results of our baseline survey in late 2021, LPG is the primary source of energy used for cooking in 72.7 percent of households in three low-income settlements in Colombo: Nawagampura, Sammanthranapura, and Lunupokuna. While 24.3 percent of those interviewed said they have used kerosene, only 2.3 percent of respondents said they used firewood for cooking.

Residents in these settlements are now switching to kerosene as the principal cooking fuel because of the LPG price hike, according to interviews conducted in these areas. Farzana, a 43-year-old mother of three children, utilized LPG as her primary cooking fuel earlier. She had to use kerosene as an alternative source due to the LPG price increase, but obtaining kerosene has now become a challenge for her. She claims that,

We switched to kerosene last month (March 2022) since cooking gas cylinder costs are increasing, but that is extremely expensive right now. To acquire kerosene, we had to wait in a large line for several hours. We can go home by 10 or 11 a.m. if we go early in the morning, around 6 a.m., to get kerosene.

However, residents who switched to kerosene, on the other hand, are unable to collect enough fuel due to the shortage. People had to wait in line for hours to get a restricted amount of kerosene. Due to limited supply by the Ceylon Petroleum Corporation (CPC), the country’s main fuel supplier, customers have had to return with empty hands on a few instances. Mallika, who is 58 years old, has been in similar predicament before. She expresses,

'Even if you stay in queues, there is no kerosene to buy. We have to return with empty hands. Now, today we don’t have kerosene, it is over.'

Fuel shortages not only make it difficult for low-income residents to go about their everyday lives, but they also have a serious impact on their livelihoods. Cooking fast food is a primary source of income for some families in these communities. Due to a shortage of cooking fuels and an unreasonably high cost of food, women who rely heavily on this source of income have been unable to operate their food businesses in recent days. People are suffering not only from rising prices, but also from supply shortages as well. It is a double burden for most of families in these sites. Rajalakshmi, who is fifty-five years old, makes her living by selling string hoppers. The price of LPG has increased, and there is a scarcity of kerosene, which has had an adverse influence on her business. She describes how the current fuel crisis is posing a problem to her business as follows,

'Due to a scarcity of kerosene, I haven't sold any string hoppers in a few weeks. I used to cook everythingusing gas, and now we use kerosene, but we can't make the amount we need with kerosene. We can't do business with this price of a gas cylinder. We will not be able to profit from this. I bought three liters of kerosene after waiting in line for five hours yesterday (March 14, 2022). There are a limited number of servings available. We are about to be thrown into a financial disaster very soon.'

Most residents, especially men, work in the informal sector, which results in job insecurity and low wages. For a significant proportion of the males in the area, riding a three-wheeler is their primary source of income. Although some of them have their own three-wheelers, the majority of them rent them or buy them through leasing companies. Due to curfews, and constant lockdowns, their income was significantly impacted by the Covid -19 pandemic. As they prepare to overcome it, they are confronted with a new problem in the form of a fuel shortage. Fuel shortages make it difficult for such people to earn money on a regular basis. On the one hand, petrol prices are at their highest, and they must stay in queues for more than 4 to 5 hours to fill the tank. As a result, the amount of driving hours and thus their earnings are falling.

Farhana is 26 years old and lives with her husband and two children in a small house. Farhana's husband lost his job as a result of the Covid-19, and he has since worked in a variety of jobs. Six months ago, Farhana's husband bought a three-wheeler through leasing facilities and began riding it for hire. However, the continuous fuel crisis is putting a strain on this family's finances. Farhana describes their position as,

'My husband leased a three-wheeler from a leasing company. We have to pay a monthly rent of 20,000 rupees. Previously, he earned between 2,000 and 2,500 rupees, which covered our expenses and allowed us to pay our monthly rent. However, his earnings have decreased dramatically because of rising fuel prices and shortages. With great difficulty, he now earns roughly 1,000 rupees. We are finding it difficult to manage our day-to-day expenses with this money. We have not paid the rent for the last three months. The leasing company can confiscate the three-wheeler any time.'

Since most residents in low-income settlements rely heavily on daily income, the current fuel crisis has made things much more difficult for them. People must wait hours in lengthy lines for kerosene and petrol while suffering from frequent power outages. Both price increases and insufficient fuel supplies have a significant impact on income, as many of their livelihoods are dependent on food preparation, three-wheeler transportation, and daily wage labor.

In some locations, the situation became chaotic, and people began to protest against the government. The government deployed police to the petrol station to keep huge lines of people under control, and in certain cases, tear gas was used when people became agitated. This issue has resulted in political instability in the country.

Mohideen M. Alikhan is Lecturer at University of Peradeniya (Research Consultant at the Centre for Migration Research and Development (CMRD)) and Sakeena Alikhan is Assistant Librarian at University of Colombo (Researcher & GIS/Mapping Specialist at the Centre for Migration Research and Development (CMRD)) are members of the Inclusive Urban Infrastructure (IUI) team. IUI is a project funded by UK Research and Innovation through the Global Challenges Research Fund under the title ‘Towards Trajectories of Inclusion: Making infrastructure work for the most marginalised’ (grant reference number ES/T008067/1).