By Asiri Fernando in The Sunday Morning, Mar 26, 2023
The Government is considering the release of nearly 450 fuel stations held under the Treasury to the three new international players that are to enter the local fuel market once approved by the Cabinet, The Sunday Morning learns.
According to a senior official at the Ministry of Power and Energy, the State-owned properties of the 450 fuel stations are expected to be allocated to the three international companies in 150 station blocks.
“There are about 450 petrol sheds that are held by the Treasury and they will be issued to the three newcomers, at 150 per entity. Sinopec has already shown interest. The firms are making preparations to enter the sector as soon as approval is given,” the official said.
Earlier this month, a delegation from China’s Sinopec visited Sri Lanka and met key Government and Ceylon Petroleum Corporation (CPC) officials, expressing their interest in developing an export-oriented refinery in Hambantota. It is learnt that Sinopec is also looking at taking over one-third of the 450 fuel stations that are being released.
It is also learnt that Australia- and US-based companies are shortlisted as the other two international parties to enter the domestic fuel market.
When contacted, Treasury Deputy Secretary R.M.P. Rathnayake confirmed that the 450 fuel stations held under the Treasury had been earmarked for release to the new foreign players.
“Yes, they are the ones held under the Treasury, because the Government has decided that it will not continue to engage in business activities,” Rathnayake told The Sunday Morning.
Once the new players enter the market, Sri Lanka will see five entities engage in the energy sector, with the CPC and the Lanka Indian Oil Company (LIOC) already present.
The new players will be allowed to store fuel in the storage facilities managed by the Ceylon Petroleum Storage Terminals Ltd. (CPSTL) and may be offered similar terms to those given to LIOC for its use.
According to Ministry of Power and Energy Secretary Mapa Pathirana, the CPSTL will charge a fee from the new clients for using its storage facilities.
In October last year, Sri Lanka approved the amending of the Petroleum Products (Special Provisions) Act No. 33 of 2002, to liberalise petroleum imports.
The Ministry of Power and Energy is expected to seek Cabinet approval to proceed with the new international supplier in the coming weeks.
Attempts to contact the Minister of Power and Energy on seeking Cabinet approvals and the terms offered to the new players failed.
https://www.themorning.lk/articles/muafRDS4orrzVFMA6mz2
