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)