China’s Sinopec enters Sri Lanka’s fuel market

Sri Lanka has signed a long-term agreement with Sinopec on the retail sale of fuel.

A proposal by a state-owned Chinese company was approved by Sri Lanka in March to liberalize retail fuel marketing in a country with a large number of players from China, Australia and the United States.

Previously, the retail fuel market of the island state was a state monopoly of the Ceylon Petroleum Corporation (CPC) until 2003, then the Indian Oil Company (IOC) was allowed to operate.

Negotiations have been completed with Sinopec Fuel Oil Lanka Ltd and its parent company in China and Singapore to conclude a long-term contract for the storage, distribution and sale of petroleum products in the island state.

The government has given permission to grant licenses to Sinopec, United Petroleum Australia and RM Parks of USA in cooperation with Shell Plc to enter the retail fuel market in Sri Lanka.

The Energy and Procurement Committees approved a recommendation to grant licenses to three companies to operate. They will be allocated 150 dealer filling stations, which are currently under the jurisdiction of the state fuel organization. The parties will be granted a license to operate for 20 years for the import, storage, distribution and sale of petroleum products in Sri Lanka.

At the moment, the deal has been concluded only with Chinese Sinopec.