It’s now official: Sinopec to enter Sri Lanka fuel retail market

Sinopec has signed an agreement to enter Sri Lanka’s retail fuel market. Based in Beijing, China, the company is the largest oil and petrochemical products supplier and the second largest oil and gas producer in China, the largest refining company and the second largest chemical company in the world. Its total number of gasoline stations ranks it second place in the world. 

The agreement, signed on May 23, 2023, in Sri Lanka’s capital Colombo, was made to “ensure uninterrupted fuel suppliers to consumers,” the president’s office said in a news release.

Sinopec can start operations within 45 days of license issuance and “this development brings hope for a more stable and reliable fuel supply, boosting the country’s energy sector and providing assurance to consumers,” it added.

The agreement would enable Sinopec to import, store, distribute and sell petroleum products in Sri Lanka, which has had a fuel shortage for more than a year now. Sinopec will be granted a 20-year license to operate 150 fuel stations currently operated by Sri Lanka’s state-run Ceylon Petroleum Corporation (CPC). In addition, Sinopec will invest in 50 new fuel stations and in the country’s energy sector, Sri Lanka’s Power and Energy Ministry said.

The move comes as the Chinese government moves to consolidate its investments in Sri Lanka’s ports and energy sector amid growing security concerns raised by Sri Lanka’s next-door  neighbor, India.

Sri Lanka, which has been facing a foreign exchange crisis, hopes the agreement with Sinopec will help to resolve its current energy crisis.