Sri Lanka’s cabinet has approved a proposal to liberalize fuel retailing by allowing more players from China, Australia and the US to enter the market. The island nation’s retail fuel market was a state monopoly under the Ceylon Petroleum Corporation (CPC) until 2003, when the Indian Oil Corporation was allowed to operate. Energy Minister Kanchana Wijesekara tweeted: “Cabinet approval was granted to grant licenses to Sinopec, United Petroleum Australia and RM Parks of USA in partnership with Shell Plc to enter the retail fuel market in Sri Lanka”.
Wijesekara added that the energy committee and procurement committees had approved a recommendation to grant operating licenses to the three companies.
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They will be allocated 150 dealer-operated fuel stations that are currently managed by state-owned fuel entity Ceylon Petroleum Corporation.
“They will be granted a license to operate for 20 years to import, store, distribute and sell petroleum products in Sri Lanka,” the minister added.
Lanka IOC (LIOC), the subsidiary of the Indian Oil Corporation in Sri Lanka, proved a welcome addition when the CPC was caught in the economic crisis and imports were not possible due to the shortage of foreign exchange in last year.
Fuel sector unions, which opposed the deal with the IOC, say they oppose the new fuel sector liberalization policy.
LIOC in the middle of last year enjoyed a 16 percent market share of gasoline and diesel.
For lubricants, bitumen and oil accumulation, its market share was more than 35%.
