Police shot dead a protester and wounded 24 others in the first fatal clash with residents demonstrating against the government over a crippling economic crisis.

Sri Lanka is on the brink of bankruptcy, with nearly $7 billion of its total $25 billion in foreign debt due for repayment this year.
Sri Lanka is on the brink of bankruptcy, with nearly $7 billion of its total $25 billion in foreign debt due for repayment this year. (AFP)

Sri Lankan police have opened fire at a group of people protesting new fuel price increases, killing one and injuring 20 others, in the first shooting by security forces during weeks of demonstrations over the country's worst economic crisis in decades.

Police confirmed that they shot at the protesters in Rambukkana, 90 kilometres northeast of Colombo, the capital. 

Police spokesman Nihal Talduwa said the demonstrators were blocking railway tracks and roads and had ignored police warnings to disperse. He said protesters also threw rocks at police.

"One man died of gunshot injuries," a hospital official told AFP news agency by telephone.

Another 16 protesters were wounded, with eight in need of emergency surgery, while a further eight police officers were injured, the hospital official said.

An indefinite curfew was imposed in the area, officials said.

The protest was one of many spontaneous gatherings staged around Sri Lanka on Tuesday, after the country's main petrol retailer hiked prices by nearly 65 percent.

Local media footage showed dozens of police officers wearing anti-riot gear firing tear gas into the crowd.

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On brink of bankruptcy

Sri Lanka is on the brink of bankruptcy, with nearly $7 billion of its total $25 billion in foreign debt due for repayment this year. A severe shortage of foreign exchange means the country lacks money to buy imported goods.

In the capital Colombo, a large crowd has been camped outside the seafront office of President Gotabaya Rajapaksa for more than a week, demanding the leader step down.

Rajapaksa  acknowledged public anger over the ruling family's mismanagement on Monday after appointing a new cabinet to navigate the country out of the crisis.

"People are suffering because of the economic crisis and I deeply regret it," he said.

Sri Lanka's economic meltdown began after the coronavirus pandemic torpedoed vital revenue from tourism and remittances.

The government last week announced a default on its $51 billion foreign debt and the Colombo Stock Exchange has suspended trading to prevent an anticipated market collapse.

Rajapaksa's administration has urged citizens abroad to donate foreign exchange to help pay for desperately needed essentials.

Colombo has sent a delegation to Washington and opened bailout talks with the International Monetary Fund.

READ MORE: Sri Lanka to reduce president's powers in a bid to end turmoil

Source: TRTWorld and agencies