Sinopec targets Sri Lankan fuel market with nationwide launch
Sinopec, a prominent oil and gas entity from China, is gearing up to initiate its comprehensive fuel retail operations in Sri Lanka by the end of this month. This major development was confirmed by Kanchana Wijesekara, the Sri Lankan Minister of Power and Energy.
In the previous month, Sinopec marked its official commencement in Sri Lanka by inaugurating its maiden filling station situated in Mattegoda, West Province. Reports suggest that the company has set its sights on transitioning all 150 filling stations under its purview by October.
Earlier in May, a pivotal long-term contract was inked between Sinopec and the Ministry of Power and Energy. This agreement empowers Sinopec to import, store, distribute, and retail petroleum products across Sri Lanka. Subsequent to this contract, in July, Sinopec was endowed with a 20-year license, permitting it to manage 150 existing fuel stations. Furthermore, the company has unveiled plans to invest in the establishment of 50 new stations.
The foreign exchange crisis plaguing Sri Lanka prompted the Ministry of Power and Energy to open the domestic fuel market to international corporations. This move was aimed at ensuring a consistent fuel supply to the populace. Established entities like the Ceylon Petroleum Corporation (CPC) and Lanka Indian Oil Company (LIOC) grappled with challenges, primarily due to their inability to secure adequate foreign exchange for fuel consignments. Hence, a primary criterion for foreign investors was their capability to obtain foreign exchange without relying on the domestic banking sector.
Sinopec’s foray into the Sri Lankan market is in sync with the overarching objectives of the Sri Lanka Energy Reform. This reform is designed to enhance the nation’s energy security, accessibility, and sustainability.
During a recent interaction with Sinopec officials, Wijesekara delved into various subjects, encompassing the progression of Sinopec’s fuel retail operations, dealer agreement signings, branding strategies, and the nationwide commencement of its fuel operations.
Local news outlets have also highlighted Sinopec’s commitment to establishing a new oil refinery in Hambantota, home to the Hambantota International Port. This port, inaugurated in 2010, stands as Sri Lanka’s second-largest, following Colombo. Notably, this deep-water port is currently under a 99-year lease to China.
