https://sputniknews.in/20230327/sri-lanka-greenlights-global-giants-entry-into-fuel-distribution-market-1330160.html
Sri Lanka Greenlights Global Giants Entry Into Fuel-Distribution Market
Sri Lanka Greenlights Global Giants Entry Into Fuel-Distribution Market
Sputnik India
The Sri Lankan cabinet has granted approval to companies from China, the US and Australia to enter the country's fuel-distribution market, the country’s energy minister Kanchan Wijesekera said on Monday.
2023-03-27T21:56+0530
2023-03-27T21:56+0530
2023-03-27T21:56+0530
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The Sri Lankan cabinet has granted approval to companies from China, the US and Australia to enter the country's fuel-distribution market, the country’s Minister for Power & Energy Kanchan Wijesekera said on Monday.The minister stated that all the three companies would be allocated 150 fuel stations each, all of which are currently operated by the state-backed Ceylon Petroleum Corporation (CPC).Wijesekera said that the three new entrants would be given a 20-year license to import, store, distribute and sell petroleum products in Sri Lanka. Further, these companies will also be allowed to set up 50 new stations each at new locations across the country.The announcement comes over a week after the International Monetary Fund’s (IMF) Executive Board approved a 48-month loan worth $3 billion under the Extended Fund Facility (EFF) for the cash-strapped economy, per a statement.The IMF dispatched the first tranche worth $330 million under the bailout last week.Divesting Stake in Loss-Making State Petroleum CompanyThe CPC and Lanka Oil, the Sri Lankan subsidiary of the New Delhi-backed Indian Oil Corporation (IOC), have maintained a duopoly in the Sri Lankan fuel-distribution market till today.Amid the bailout discussions with the IMF since the economic crisis peaked in 2021, the Sri Lankan authorities have maintained they intend to sell stakes to private players in the fuel-retail business.Sri Lanka experienced crippling fuel shortages which affected almost everyone and brought the economy to a virtual standstill.The balance of payments crisis and accompanying food and fuel shortages in Sri Lanka are the worst since Independence. The crisis triggered political protests which led to the ouster of former President Gotabaya Rajapaksa.
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Sri Lanka Greenlights Global Giants Entry Into Fuel-Distribution Market
Colombo began discussions with foreign fuel retails to enter the domestic market last year, in the wake of fuel shortages caused by lack of foreign exchange reserves.
The Sri Lankan cabinet has granted approval to companies from China, the US and Australia to enter the country's fuel-distribution market, the country’s Minister for Power & Energy Kanchan Wijesekera said on Monday.
“The cabinet approval (has been) granted to award licenses to Sinopec, United Petroleum, Australia and RM Parks of USA in a collaboration with Shell Plc to enter the fuel retail market in Sri Lanka,” stated Wijesekera.
The minister stated that all the three companies would be allocated 150 fuel stations each, all of which are currently operated by the state-backed Ceylon Petroleum Corporation (CPC).
Wijesekera said that the three new entrants would be given a 20-year license to import, store, distribute and sell petroleum products in Sri Lanka. Further, these companies will also be allowed to set up 50 new stations each at new locations across the country.
The announcement comes over a week after the International Monetary Fund’s (IMF) Executive Board approved a 48-month loan worth $3 billion under the Extended Fund Facility (EFF) for the cash-strapped economy, per a statement.
The IMF dispatched the first tranche worth $330 million under the bailout last week.
Under the terms of the IMF loan, Sri Lankan authorities have been asked to continue with policies aimed at “fiscal consolidation” and carry out “progressive tax reforms”.
Divesting Stake in Loss-Making State Petroleum Company
The CPC and Lanka Oil, the Sri Lankan subsidiary of the New Delhi-backed Indian Oil Corporation (IOC), have maintained a duopoly in the Sri Lankan fuel-distribution market till today.
Amid the bailout discussions with the IMF since the economic crisis peaked in 2021, the Sri Lankan authorities have maintained they intend to sell stakes to private players in the fuel-retail business.
Sri Lanka experienced crippling fuel shortages which affected almost everyone and brought the economy to a virtual standstill.
The balance of payments crisis and accompanying food and fuel shortages in Sri Lanka are the worst since Independence. The crisis triggered political protests which led to the ouster of former President Gotabaya Rajapaksa.
