New players to energy market

The Sri Lankan government's plan to allow three foreign players to enter the local energy market is facing delays due to ongoing negotiations with Australia-based United Petroleum (Pty) Ltd. While agreements have been signed with Chinese petro giant Sinopec. Us-based RM Parks-Shell, talks with United Petroleum are still in progress.

 

 

After signing agreements in Colombo, the government had expected all three players to enter the market next month. However, a consensus has yet to be reached with United Petroleum. The Ministry of Power and Energy Secretary, M.P.D.U.K. Mapa Pathirana, confirmed that negotiations were ongoing but did not provide a timeline for their conclusion.

 

 

Concerns have been raised about the slow progress in negotiations with United Petroleum, considering that agreements have already been signed with Sinopec and RM Parks-Shell. Previously, it was reported that R.M. Parks and Sinopec were seeking a fuel pricing formula with a floor and ceiling price.

 

 

Regarding the current fuel price formula, Pathirana stated that the proposed ceiling and floor price fluctuation would require Cabinet approval to be implemented. The current fuel price formula remains unchanged.

 

 

The Lanka Indian Oil Company (L.I.O.C.) is already operating as a foreign player in the local energy market and is expanding its operations, including at the Trincomalee Oil Tank Farm; a strategic facility jointly revived with the state-owned Ceylon Petroleum Corporation (C.P.C.).

 

 

Under the 20-year agreements signed with Sinopec and RM Parks-Shell, each entity is expected to acquire 150 fuel stations. The Cabinet of Ministers has approved the transfer of 450 fuel stations, previously held by the Treasury, to the three new players.