The signing of an agreement with Sinopec, a leading international petroleum company, ensuring a stable and continuous supply of fuel for Sri Lanka took place this morning (22) at the President’s Office.
Secretary of the Ministry of Power and Energy Mapa Pathirana and Chen Chengmim, Managing Director of the Fuel Production and Marketing Department of Sinopec Company, signed the agreement in front of the President.
The Ministry of Power and Energy said that this step will ensure a continuous supply of fuel so that consumers do not face difficulties in the face of the ongoing foreign exchange crisis in Sri Lanka.
“Ceylon Petroleum Corporation (CPC) and Ceylon Indian Oil Company (LIOC) faced a major challenge last season when they were unable to provide sufficient foreign exchange for fuel shipments,” the authorities said.
“To solve this problem, the Ministry looked at various strategies and as a solution asked about the supply of fuel to Sri Lanka from reputable petroleum companies established in fuel-producing countries.”
Its purpose was to import, store, distribute, and sell petroleum products through the distribution sales agent networks operating in the country. Accordingly, the proposal was approved by the Cabinet of Ministers.
One of the key conditions for new retail suppliers entering the market is the ability to secure foreign exchange requirements themselves without relying on local banks. Accordingly, these companies should use their own funds for the procurement of fuel through foreign sources at least during the initial year of operation. After receiving their consent for this, the shortlisted companies were invited to submit their proposals.
The Cabinet Appointed Special Committee (CASC) and Technical Evaluation Committee (TEC) scrutinized the proposals and recommended the award of contracts to the following companies subject to negotiations.
Those companies are,
Sinopec Fuel Oil Lanka (Private) Limited, F5, Hambantota Maritime Centre, Mirijjawila, Hambantota.
United Petroleum Pty Ltd, 600, Glenferrie Road, Hawthorn, Victoria 3122, Australia.
RM Parks, 1061 N. Main Street, Porterville, California 93257, USA in association with Shell PLC.
Sinopec and its subsidiaries are to start operations in Sri Lanka within 45 days after the license is issued. This process will ensure a more stable and reliable fuel supply and will also contribute to boosting the country’s energy sector.
Power and Energy Minister Kanchana Wijesekera, State Ministers D.V. Chanaka, Indika Anuruddha, Shehan Semasinghe, Presidential Senior Adviser on National Security and Chief of Presidential Staff Sagala Ratnayake, Presidential Secretary Saman Ekanayake, Presidential Senior Adviser on Economic Affairs Dr. R.H.S. Samaratunga, Central Bank Governor Dr. Nandalal Weerasinghe, Chinese Ambassador Qi Zhenhong, Chairman of Sinopec Company Yu Baocai and Director of International Cooperation Department Fan Liping were present at the event.