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Saturday March 2nd, 2024

US-based RM Parks to start fuel supply in Sri Lanka soon; United faces delay

ECONOMYNEXT – The United States-based RM Parks has deposited a required performance bond and the first shipment may arrive in Sri Lanka within the next two months, while the launching of United Petroleum Australia is facing delay, the State Power & Energy Minister said.

Sri Lanka in July this year awarded retail fuel licenses to three foreign firms, namely, China’s Sinopec, United Petroleum Australia and US-based RM Parks to reduce the state-owned Ceylon Petroleum Corporation’s (CPC) pressure on finding foreign currency for the country’s whole fuel import.

Sinopec has already started operations.

“As of now, RM Park has already deposited a $1 million performance bond. They have informed us that they will deposit the $2 million license fee in the next week,” D V Chanaka said on Thursday (19).

“They need to bring the first shipment within 45 days from the day they pay the license fee.”
Sinopec is already importing fuel for $40 million monthly and if all three start operations in its full potential, the government can save up to $1.5 billion from fuel imports, he said.

The government has imposed conditions for all the three fuel retailers to use foreign currency from their mother company for imports while banning the repatriations of foreign currency from Sri Lanka.

United Petroleum Australia, the third new fuel retailer, however is facing a delay after a request in contrary to the earlier conditions.

“The United (Petroleum Australia) has requested for some time. They requested permission to remit dollars outside Sri Lanka. We did not allow that because the main objective of this is to find a solution (of lack of dollars we had in the past,” D V Chanaka said.

“So the objective was to import fuel using the dollars from the supplier’s country for one year and to increase competition. We will not deviate from our objectives.” (Colombo/Oct 21/2023)

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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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