Sri Lanka to lease 450 state-owned fuel stations for Chinese, US, Australian firms with Shell JV

COLOMBO – Sri Lanka cabinet has granted approval for three oil companies from China, the United States, and Australia in collaboration with Shell Pl to lease 150 fuel station for each company to operate in local market, Minister of Energy Kanchana Wijesekera said.

“Cabinet approval was granted to award licences to Sinopec, United Petroleum, Australia & RM Parks of USA in a collaboration with Shell Plc to enter the Fuel Retail market in Sri Lanka,” Wijesekera tweeted.

“Energy Committee & relevant other procurement committees had given their approval & recommendation to award the 3 companies the licences to operate,” Wijesekera added.

The move comes as President Ranil Wickremesinghe administration has decided to sell government stake in seven key state owned enterprises including loss-making fuel retailer Ceylon Petroleum Corporation (CPC).

“The 3 companies will be allocated 150 Dealer operated fuel stations each which are currently operated by CPC and they will be granted a licence to operate for 20 years to import, store, distribute and sell petroleum products in Sri Lanka.

“A further 50 fuel stations at new locations will be established by each selected company,” Wijesekera said.

The discussions to allow foreign players to enter into local fuel distribution began in June 2022, during the peak of the economic crisis, where the government was struggling to supply fuel requirement.

Currently Sri Lanka has CPC and a subsidiary of Indian Oil Corporation (Lanka IOC) as the fuel distributors in a duopoly market.

Wijesekera last year said that new companies entering into Sri Lanka may be given 200 to 300 filling stations out of the 1,190 operated by the CPC.

At the moment 90% of fuel distribution is done by the CPA and about 10%by Lanka IOC.


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