Cabinet nod to liberalise petroleum industry

Wednesday, 29 June 2022 00:26 - - {{hitsCtrl.values.hits}}

Companies from oil-producing countries to be allowed to undertake imports, distribution, and retail
Minister Kanchana Wijesekara says firms will be selected based on their ability to import fuel without needing forex from banks
CPC to remain as service provider for logistics, storage, and distribution, and will charge a service fee from the companies
Says selected outlets among existing 1,190 Ceypetco stations will be given to LIOC and to new fuel importers
Assures Sapugaskanda oil refinery will continue to be operated by CPC

The Cabinet of Ministers at its meeting on Monday decided to liberalise the petroleum industry by allowing companies from oil-producing countries to engage in importation, distribution, and retail activities.

The move comes as the Government struggles to secure $ 500 million monthly to import fuel amidst the worst foreign reserves and currency crisis faced by the country.

“Companies will be selected based on their ability to import fuel and operate without needing to obtain foreign exchange from the Central Bank of Sri Lanka or other commercial banks, during the first few months of their operations,” Power and Energy Minister Kanchana Wijesekera said yesterday.

At present, the State-run Ceylon Petroleum Corporation (CPC) contributes around 90% of the total fuel supply to the country, while the remaining 10% is supplied by the Lanka Indian Oil Company (LIOC).

“Ensuring an uninterrupted fuel supply to the country has become a challenge due to the current foreign exchange crisis in Sri Lanka. Therefore, it seems appropriate to enter into long-term agreements with companies in the oil-producing countries to enable them to import and sell fuel using their funds so as not to put pressure on the country's foreign exchange problem,” a statement comprising weekly Cabinet decisions issued by the Government Information Department noted.

Minister Wijesekara also said the CPC will remain as a service provider for logistics, storage, and distribution and will charge a service fee from the companies.

In addition, he pointed out that a decision was taken to establish new filling stations, whilst selected outlets among the existing 1,190 Ceypetco stations will be given to the LIOC and new fuel importers.

The Minister assured that the oil refinery in Sapugaskanda will continue to be operated by the CPC.

The proposal to this effect submitted by Power and Energy Minister Wijesekara was approved by the Cabinet of Ministers to provide long-term agreements with selected companies following the formal procedure to enter the local market.