The biggest obstacle preventing the kick start of tourism is the absence of fuel. This is not necessary because tourists bring in the foreign currency necessary for the country to purchases fuel.
This is given that, foreigners are insisted to to pay in dollars, according to a forex system. Industry needs around one shipment per month which is less than US$40 m, and the ministry can make good money by selling this to the industry.
Regardless of tourists, Sri Lankans themselves are requested not to travel into Sri Lanka due to the dollar- and consequent Fuel- shortage. Though, we provide preferential treatment to fuel for tourists this is not possible in the case of extremely lengthy queues, thus travel to Sri Lanka is impractical and discouraged.
A country cannot move out of a crisis only by saving and borrowing usd as their only 2 strategies. Earning USD is essential and this proposal recommends exactly that.
THE PROPOSAL – Allocate few Petrol Sheds in the Country (Geographically and strategically selected to serve Tourist Routes) exclusively for the sale of Fuel to Tourist vehicles. For individual tourists payment can made via dollar accounts and for groups separate means must be adopted. All purchases made should make in foreign currency and processed as a forex payment.
Key aspects –
1. Fuel is provided only for CARDS of Foreign currency accounts
2. These sales are higly profitable to Sri Lanka if one were to calculate the difference between CIF Cost of Fuel against Ultimate Retail Price of Fuel in USD. The difference is local value addition – Taxes, Costs incurred all in Sri Lankan Rupees. All these are now paid in us dollars.
3. Surplus sales bringing in USD and therefore, even if a Tourist buy a ship load of fuel, we have earned millions of dollars. There is no loss of foreign exchange – but gain of foreign exchange.
4. If CPC is unable to conduct this program, it can be handed over to a Private Party as it is self-sustaining model working entirely in USD. The Private Party importing in USD, will have to finance in USD on its own and EARN USD through Sale to Foreigners to Continue business. So there is no way USD can be siphoned off.
5. The entire program must come under the supervision of the central bank of sri lanka and it should only allow import in USD and the surplus could be utilized by the Central Bank for other imports. So the entire forex earning should be in the hands of Sri Lankan Government.
THE SITUATION – IF NOT IMPLEMENTED
The main objective of the Exercise is to kick start tourism which is almost zero due to shortage of Fuel. If it is kick starts it will lead to the additional dollars and the economic activity across the Country and uplift the living standards all connected to Tourism industry. The USD earned will help us to import additional Fuel for the people of Sri Lanka.
The ultimate aim of the exercise is to earn foreign exchange while creating Economic Activity.
Note: The writer Dr. Rohan Karunaratne has over 30 years of experience in Civil Engineering and construction.