Sinopec, a Beijing-based leading international petroleum company, has officially kicked off its business operations in Sri Lanka, by supplying fuel at its first filing station on the island established in Mattegoda, Colombo.
Sinopec Fuel Oil Lanka, the local subsidiary of the Chinese petroleum giant began its retail operations on Wednesday (Aug. 30), with a market promotion campaign. Accordingly, petrol and diesel are pumped at a discount of Rs. 3.00 per liter.
Last year, the Sri Lankan government decided to open up Sri Lanka’s fuel import and retail sales market to companies from oil-producing nations in a bid to address the foreign exchange crisis. The Petroleum Products (Special Provisions) Bill also received the approval of ministerial consultative committee on power & energy, paving way for the new suppliers to enter the local fuel market as importers, distributers, and retail operators for petroleum products.
In March 2023, the Cabinet of Ministers gave the nod to award licenses to China’s Sinopec, Australia’s United Petroleum and RM Parks of the USA, in collaboration with multinational oil and gas company – Shell PLC, to enter the fuel retail market in Sri Lanka.
Subsequently, negotiations were completed with Sinopec Fuel Oil Lanka and its parent company for a long-term contract on the importation, storage, distribution and sale of petroleum products across the island nation.
Later in May 2023, a contract agreement was inked between Sri Lankan and Sinopec representatives, marking a crucial step in ensuring a steady and uninterrupted fuel supply in the country.
Under this deal, Sinopec is granted a 20-year license to operate 150 filling stations in Sri Lanka, and will also be able to invest in 50 new filling stations.
Sri Lanka’s fuel retail market remained a state monopoly under the Ceylon Petroleum Corporation (CPC) until 2003 when the Indian Company (IOC) commenced operations here.