By Uditha Jayasinghe
COLOMBO, March 2 (Reuters) - Long queues formed at fuel stations across Sri Lanka on Monday as the conflict in Iran fed fears of oil shortages in the island nation, which is still recovering from a deep financial crisis.
The nation of 22 million people is clawing its way back from a crisis brought about by a record shortfall of dollars in 2022, supported by a $2.9 billion loan programme from the International Monetary Fund.
At the height of its problems Sri Lanka faced a massive fuel shortage for months that sparked huge protests and the eventual ousting of former President Gotabaya Rajapaksa in July 2022.
On Monday, people lined up at fuel stations across the island as U.S. and Israeli strikes on Iran stoked fears of another fuel shortage.
Many people were panic buying despite assurances from the authorities that Sri Lanka had enough stocks of diesel and petrol to last 35 and 37 days, respectively - the full amount that the country usually stores.
"There is fuel. People are panicking because of the war and they are themselves creating these lines. So people are just flocking to the stations, but there is enough fuel in Sri Lanka," said Mohammed Aslem, a 36-year-old three-wheeler driver standing in a fuel queue in Colombo.
Sri Lanka spent $3.83 billion on fuel imports last year, according to government data, with most shipments arriving from India and Singapore.
"Sri Lanka does not have enough storage facilities to store fuel beyond the next few weeks, but there are sufficient confirmed shipments till the end of this month," said S. Rajakaruna, chairman of the state-run Ceylon Petroleum Corporation told reporters.
The CPC also stepped up distribution, releasing more than 5 million litres of fuel despite Monday being a public holiday, Rajakaruna added.
Police have ordered stations to stop dispensing fuel into cans and have warned of legal action against hoarders.
Lanka IOC PLC LIOC.NS, a unit of Indian Oil Corporation, and China's Sinopec 600028.SS who also operate fuel stations reassured the public of adequate supply.
(Reporting by Uditha Jayasinghe; Editing by Hugh Lawson)
((Uditha.Jayasinghe@thomsonreuters.com;))
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