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

By Mohideen M. Alikhan and Sakeena Alikhan - 24.07.2022

Long queue for kerosene in the Sammantharanapura

Since August 2021, the insufficient supply, and higher prices of liquefied petroleum gas (LPG), petrol and diesel have had a significant impact on the lives of all Sri Lankans, especially the poor. Due to a lack of foreign reserves, the Sri Lanka has been experiencing a serious economic crisis.

From January to March 2022 alone, the Sri Lankan rupee depreciated against the US dollar by 26%. This depreciation has increased the price of essential goods, such as fuel. The price of a 12.5kg LPG cylinder was 1493 rupees in September 2021, 2675 rupees in October 2021 and 4,860 rupees in late April 2022. Similarly, the price of a litre of petrol was 137 rupees in June 2021; this rose multiple times to reach 338 rupees in April 2022. Shortages of fuel supplies have been particularly acute in recent months.

Power outages have become regular throughout the country as a result of fuel shortages and the reliance on fuel-generated electricity. Further, many cities have been plunged into chaos due to the 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.

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

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, previously used LPG as her primary cooking fuel. She had to switch to kerosene, but even obtaining this fuel has now become a challenge for her. She explained:

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

Due to the Ceylon Petroleum Corporation, the country’s main fuel supplier, having limited supplies, some customers have even had to return home without kerosene. Mallika, who is 58 years old, has had this experience. She said:

"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, 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 the high cost of food, women who rely heavily on this source of income have been unable to operate their food businesses in recent months. Supply shortages and rising prices act a double burden for most families in these low-income settlements. Rajalakshmi, who is 55 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 described how the current fuel crisis is so problematic for her business:

"Due to a scarcity of kerosene, I haven't sold any string hoppers in a few weeks. I used to cook everything using 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… I bought three liters of kerosene after waiting in line for five hours yesterday... We are about to be thrown into a financial disaster very soon."

Most residents in these settlements, especially men, work in the informal sector, which results in job insecurity and low wages. For a significant proportion of the men 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. However, their income was significantly impacted by curfews and lockdowns related to the COVID-19 pandemic. As they seek to return to normal work schedules, they are confronted with a new problem in the form of fuel shortages. Fuel shortages make it difficult for such people to earn money on a regular basis. As well as petrol prices being high, they must stay in queues for over 5 hours to fill their tanks. As a result, the number of hours they can drive and thus earn an income has fallen.

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 pandemic, and he has since worked 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 described their current financial difficulties:

"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 [a month], which covered our expenses and allowed us to pay our rent. However, his earnings have decreased dramatically because of rising fuel prices and shortages. With great difficulty, he now earns roughly 1,000 rupees [a monthly]. 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 wages, 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 (Research Consultant at the Centre for Migration Research and Development) and Sakeena Alikhan (Researcher & GIS/Mapping Specialist at the Centre for Migration Research and Development) 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).