Sri Lanka signs agreement with Sinopec to allow it to enter the fuel retail market in Sri Lanka
The Sri Lanka Government has signed an agreement with Sinopec Fuel Oil Lanka (Pvt) Ltd and its parent company in China and Singapore for a long-term contract on the importation, storage, distribution & sale of petroleum products in Sri Lanka, the President’s Media Division (PMD) reported.
The Agreement was signed today (May 22) at the Presidential Secretariat.
Following the recommendations of the Cabinet Appointed Special Committee, negotiations have been completed with Sinopec Fuel Oil Lanka (Pvt) Ltd and its parent company in China and Singapore.
Following excerpt with inputs from President’s Media:
Sri Lanka has signed a contract agreement with Sinopec, a leading international petroleum company today (May 22), marks a crucial step in ensuring a steady and uninterrupted fuel supply for Sri Lanka, the President’s Media Division (PMD) said.
The signing ceremony took place at the Presidential Secretariat, with representatives from both Sri Lanka and Sinopec in attendance.
Secretary of the Ministry of Power and Energy M.P.D.U.K. Mapa Pathirana and Chen Chengmin, Managing Director of Fuel Production and Marketing Department of Sinopec Company, signed the agreement in front of the President, it added.
On the Sri Lanka side, the Secretary of the Ministry of Power and Energy, the Chairman & Managing Director of the Ceylon Petroleum Corporation, and the Chairman of the Ceylon Petroleum Storage Terminals Limited participated. From Sinopec, representatives from Sinopec Fuel Oil Lanka (Private) Limited, Sinopec Fuel Oil Sales Co. Ltd (People’s Republic of China), and Sinopec Fuel Oil (Singapore) Pte. Ltd. were present to formalise the agreement.
In response to the on-going foreign exchange crisis in Sri Lanka, the Ministry of Power and Energy has taken this decisive action to ensure an uninterrupted fuel supply to consumers. With the inability to provide sufficient foreign exchange for fuel shipments, the Ceylon Petroleum Corporation (CPC) and Lanka Indian Oil Company (LIOC) faced significant challenges, according to the PMD.
To tackle this issue, the Ministry explored various strategies and one of them involved inviting Expression of Interests (EOIs) from reputable petroleum companies established in producing countries. The goal was to import, store, distribute, and sell Petroleum Products in predetermined Distribution Dealer operated Networks in Sri Lanka. The Cabinet of Ministers approved this initiative.
One of the key requirements for new retail suppliers entering the market was their ability to secure forex requirements without depending on the domestic banking sector. It was mandated that these companies source their own funds for fuel procurement through foreign sources, at least during the initial one-year period of operation.
After receiving EOIs, the companies that were shortlisted were invited to submit detailed proposals in response to a Request for Proposal (RFP) document. The Cabinet Appointed Special Committee (CASC) and the Technical Evaluation Committee (TEC) thoroughly scrutinized the proposals and recommended awarding contracts to the following companies, subject to negotiations:
M/s Sinopec Fuel Oil Lanka (Private) Limited, F5, Hambantota Maritime Center, Mirijjawila, Hambantota, Sri Lanka
M/s United Petroleum Pty Ltd, 600 Glenferrie Rd, Hawthorn, Victoria 3122, Australia
M/s RM Parks, 1061 N. Main St, Porterville, CA 93257, USA, in collaboration with Shell PLC
The Cabinet of Ministers, considering the recommendations made by the CASC and the Committee Appointed by the Cabinet, granted approval to award the contracts to the selected suppliers.
Sinopec, along with its affiliated companies, is set to commence operations in Sri Lanka within 45 days following the issuance of the licence. This development brings hope for a more stable and reliable fuel supply, boosting the country’s energy sector and providing assurance to consumers.
Minister of Power and Energy Kanchana Wijesekera, State Ministers D.V. Chanaka, Indika Anuruddha, Shehan Semasingha, President’s Senior Advisor on National Security and Chief of Staff Sagala Ratnayake, President’s Secretary Saman Ekanayake, Central Bank Governor Dr. Nandalal Weerasinghe, Chinese Ambassador Qi Zhenhong and representatives of Sinopec Oil Lanka Pvt. Ltd, Sinopec China Pvt Ltd and Sinopec Singapore Pvt Ltd were present on this occasion, according to the PMD.
- Sri Lanka’s Central Bank warns general public over 8 pyramid-type schemes May 31, 2023
- Sri Lankan Rupee appreciates against U.S. Dollar May 31, 2023
- Chinese reaffirms support for Sri Lanka’s economic recovery May 31, 2023
- Sri Lanka’s Central Bank to hold rates as inflation stays high May 31, 2023
- Sri Lanka to initiate new online passport application system May 30, 2023
- India extends USD 1 Billion Credit Line for Sri Lanka until March 2024 May 30, 2023
- Cabinet approves resume of the Colombo Light Rail Transit project May 30, 2023