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Saturday March 2nd, 2024

Sri Lanka to lease 450 state-owned fuel stations for Chinese, US, Australian firms with Shell JV

ECONOMYNEXT – Sri Lanka cabinet has granted approval for three oil companies from China, the United States, and Australia in collaboration with Shell Pl to lease 150 fuel station for each company to operate in local market, Minister of Energy Kanchana Wijesekera said.

“Cabinet approval was granted to award licenses to Sinopec, United Petroleum, Australia & RM Parks of USA in a collaboration with Shell Plc to enter the Fuel Retail market in Sri Lanka,” Wijesekera said in a twitter message.

“Energy Committee & relevant other procurement committees had given their approval & recommendation to award the 3 companies the licenses to operate,” Wijesekera said.

The move comes as President Ranil Wickremesinghe administration has decided to sell government stake in the seven key state owned enterprises including loss-making fuel retailer Ceylon Petroleum Corporation (CPC).

“The 3 companies will be allocated 150 Dealer operated fuel stations each which are currently operated by CPC and they will be granted a license to operate for 20 years to import, store, distribute and sell petroleum products in Sri Lanka.

“A further 50 fuel stations at New locations will be established by each selected company.”

The discussions to allow foreign players to enter into local fuel distribution began in June 2022, during the peak of the economic crisis, where the government was struggling to supply fuel to the demand.

Currently Sri Lanka has CPC and a subsidiary of Indian Oil Corporation (Lanka IOC) as the fuel distributors in a duopoly market.

Minister Wijesekera last year said that new companies entering into Sri Lanka may be given 200 to 300 filling stations out of the 1,190 operated by state-run Ceylon Petroleum Corporation.

At the moment 90 percent of fuel distribution is done by state-run Ceylon Petroleum Corporation and about 10 percent by Lanka IOC. (Colombo/ March27/2023)

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Sri Lanka eyes SOE law by May 2024 for better governance

ECONOMYNEXT – Sri Lanka is planning to pass a Public Commercial Business (PCB) Act improve governance of state-owned enterprise by May 2024 as part of an anti-corruption efforts following an International Monetary Fund assessment.

Sri Lanka’s state enterprises have been used by politicians to give ‘jobs of the boys’, appropriate vehicles for personal use, fill board of directors and key positions with henchmen and relatives, according to critics.

Meanwhile macro-economists working for the state also used them to give off-budget subsides or made energy utilities in particular borrow through supplier’s credits and state banks after forex shortages are triggered through inflationary rate cuts.

The government has taken billons of dollars of loans given to Ceylon Petroleum Corporation from state banks.

There have also been high profile procurement scandals connected to SOEs.

An SOE Reform Policy was approved by Sri Lanka’s cabinet of ministers in May 2023.

The Public Commercial Business (PCB) Act has now been drafted.

A holding company to own the SOEs will be incorporated and an Advisory Committee and Board of Directors will be appointed after the PCB law is approved, the statement said. (Colombo/Mar01/2024)

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Sri Lanka rupee closes at 308.80/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 308.80/90 to the US dollar Friday, from 309.50/70 on Thursday, dealers said.

Bond yields were broadly steady.

A bond maturing on 01.02.2026 closed at 10.65/75 percent up from 10.50/70 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent from 11.90/12.10 percent.

A bond maturing on 01.07.2028 closed at 12.15/35 percent down from 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.25/40 percent up from 12.30/45 percent.

A bond maturing on 15.05.2030 closed at 12.30/45 percent down from 12.35/50 percent.

A bond maturing on 01.07.2032 closed at 12.50/13.00 percent from 12.55/13.00 percent. (Colombo/Mar1/2024)

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Sri Lanka stocks close up 0.37-pct, Expo to de-list

ECONOMYNEXT – The Colombo Stock Exchange closed up 0.37 percent on Friday, and SG Holdings, the parent company of Expolanka Holdings Plc, said it was taking the company private.

Expolanka is the largest listed company on the Colombo Stock Exchange.

“Expolanka Holdings PLC has, at the Board Meeting held on 1st March 2024, considered a request from its principal shareholder and resolved to initiate the de-listing of the Company’s shares from the Official List of the Colombo Stock Exchange subject to obtaining necessary shareholder approval and regulatory approvals,” the company said in a stock exchange filing.

As per arrangements with SG Holdings Global Pte Ltd, the Company’s majority shareholder, it will purchase its shares from shareholders who may wish to divest their shareholding in the Company at a purchase price of Rs 185.00 per share. The share closed up at 150.50.

The broader All Share Index closed up 0.37 percent, or 39.47 points, at 10,691; while the S&P SL20 Index closed down 0.64 percent, or 19.59 points, at 3,037.

Turnover stayed above the 1 billion mark for the sixth consecutive day, registering 1.4 billion.

Crossings in Melstarcorp Plc (135mn) up at 89.50, Hatton National Bank Plc (64mn) up at 158.00, Hemas Holdings Plc (53mn) up at 75.00 and Central Finance Company Plc (26mn) up at 103.50, added significantly to the day’s turnover.

“The upward trend is continuing, with more retail buying also coming in, the number of trades was more than 10,000 today,” a market participant said. “Investors are looking for undervalued stocks and buying in quantities.” (Colombo/Mar1/2024).

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