Australia’s United Petroleum gives up on Sri Lanka

Saturday, 30 August 2025 01:41 - - {{hitsCtrl.values.hits}}

CPC MD Dr. Mayura Neththikumarage confirms company notified withdrawal, citing operational challenges and small market size
Says 64 petrol stations under United Petroleum brand revert to CPC management
Exit marks collapse of United Petroleum’s first overseas venture, despite earlier pledge of $ 27.5 m investment and 20-year BOI licence

By Charumini de Silva

United Petroleum, the Australian energy giant that made a high-profile entry into Sri Lanka’s fuel retail market in August 2024, has fully withdrawn from the country, marking a major setback for the Government’s strategy to diversify the sector.

Ceylon Petroleum Corporation (CPC) Managing Director Dr. Mayura Neththikumarage confirmed the development, stating that United Petroleum had formally notified its decision to exit three months ago.

“The company cited dissatisfaction with operational conditions and noted the size of the Sri Lankan market was too small to achieve the expected profits,” he told the Daily FT.

The company halted its fuel supplies in December 2024 following negotiations with the Government (https://www.ft.lk/front-page/CPC-Chief-refutes-claims-of-fuel-supply-threat/44-770488).

Neththikumarage said the 64 petrol stations that had signed agreements with United Petroleum have since been transferred back under CPC management.

United Petroleum’s exit is particularly notable as Sri Lanka was the company’s first overseas retail venture beyond its home market of Australia (https://www.ft.lk/front-page/Australia-s-United-Petroleum-goes-global-with-Sri-Lanka--eyes-expansion/44-765941).

The firm had entered the country with considerable fanfare, having secured a 20-year licence under the Board of Investment (BOI) framework and pledging $ 27.5 million for the import, storage, and sale of petroleum products (https://www.ft.lk/business/United-Petroleum-inks-BOI-deal-to-start-operations-with---27-5-m-investment/

34-762684).

At the time, the move was hailed as a landmark step in diversifying the country’s fuel retail landscape, with United Petroleum also outlining plans to expand its lubricant range and introduce its convenience store model at local fuel stations (https://www.ft.lk/business/Australia-s-United-Petroleum-top-officials-meet-President-to-discuss-expansion-plans/34-766019).

The Australian firm’s departure now raises questions about the viability of Sri Lanka’s policy to liberalise the fuel market. In March 2023, the Cabinet approved the entry of three new global players from China, the United States, and Australia; granting 20-year licences. (https://www.ft.lk/top-story/More-to-make-fuelling-merrier/26-746791).

The move was intended to boost competition, ensure supply stability and attract much needed foreign direct investments (FDIs).

With United Petroleum’s withdrawal, only the Indian, Chinese and US entities remain in the field, leaving the Government with the challenge of reassuring investors and consumers about the long-term prospects of fuel sector reforms.