Cabinet nod to allow foreign fuel companies enter local market

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Cabinet approval was granted to allow companies from oil-producing countries to enter the fuel import and retail sales market.

Minister of Energy Kanchana Wijesekara tweeted that they will be chosen based on their ability to import fuel and operate, without the assistance of the Central Bank of Sri Lanka and other commercial banks, for the first few months of operation.

The Ceylon Petroleum Corporation (CPC) contributes around 90 per cent of the total fuel supply to the country while the remaining 10 per cent is supplied by the Lanka Indian Oil Company. Ensuring an uninterrupted fuel supply to the country has become a challenge due to the current foreign exchange crisis in Sri Lanka. Therefore, it seems appropriate to enter into long-term agreements with oil companies in the oil-producing countries to enable them to import and sell fuel using their funds so as not to put pressure on the country’s foreign exchange problem.

Accordingly, the Cabinet of Ministers approved the proposal presented by the Minister of Power and Energy to provide long-term agreements with selected companies following the formal procedure, allowing them to import, distribute and market fuel to Sri Lanka.

Meanwhile, the Cabinet also approved the combined proposal presented by the Minister of ports, Shipping and Aviation and the Minister of Power and Energy to allow the importation, supply and sale of Jet A-1 aviation fuel to fuel bunkers registered with the Sri Lanka Ports Authority to enable the continuation of aviation services.

The daily aviation fuel requirement for aircraft arriving in and departing from Sri Lanka is approximately 1.2 million litres. At present, the Ceylon Petroleum Corporation has failed to provide even the minimum quantity of fuel required to maintain the operations of domestic and foreign airlines due to the prevailing situation in the country.

By Thameenah Razeek