“Sri Lanka’s power minister announced that Chinese oil giant Sinopec will have the authorization to sell petrol below the country’s maximum retail price when it starts operations on September 20.”
Sri Lanka says China’s Sinopec start Sept: Kanchana Wijesekera mentioned that the entry of Sinopec into Sri Lanka will help alleviate pressure on the island nation’s foreign exchange reserves. Additionally, it’s expected that two more international gasoline operators will commence operations by October and November.
With Sinopec’s arrival, we will be able to increase fuel imports and strengthen the economy while also reducing pressure on our foreign exchange, Wijesekera told reporters.
“United Petroleum of Australia and RM Parks, a United States-based company working with Shell, have also received approval.”
The arrival of the new firms will put an end to a market duopoly held by the government-run Lanka IOC and Ceylon Petroleum Corp.
The Chinese company will receive a 20-year licence to run 150 petrol stations as well as the right to make investments in 50 additional fuel stations under the terms of the new agreement.
Sri Lanka, whose reserves stood at $3.8 billion at the end of July, is currently experiencing its greatest financial crisis since gaining independence from the British in 1948.
The war in Ukraine, which resulted in long lineups at gas stations and lengthy power outages, as well as the island’s rising energy expenses, significantly hurt the island’s economy last year.
“We have also shortlisted Sinopec and Vitol for a refinery project in southern Sri Lanka, and we anticipate receiving their request for proposals by the end of August,” Wijesekera continued.
The refinery project has been in discussion since 2019 and might cost up to $4 billion.