The decision to operate the Sapugaskanda Oil Refinery as a separate private entity from the Ceylon Petroleum Corporation (CPC) has been annulled, The Sunday Morning learns.
Despite the approval granted by the previous Cabinet for the refinery’s operations as a separate enterprise, the CPC’s newly-appointed Chairman D.A. Rajakaruna stated that it was still too early to make an informed decision.
“No decisions have been made in relation to this development yet,” he said.
“We will need more discussions, studies, and research before we proceed with such decisions.”
Rajakaruna stated that while the CPC already had a framework for its future endeavours, it would take time and effort to implement such strategies going forward.
“For now, we have prepared and we have published a policy for the energy sector and we are focusing on working according to this policy.”
Previously, it was alleged that over 650 employees at the Sapugaskanda Oil Refinery, Sri Lanka’s only oil refinery, would face potential job losses as the facility transitioned to a State-Owned Enterprise (SOE).
Allegations were rife that the then Government intended to retain only about 200 employees, placing the remaining workers in a pool for future hiring needs.
This proposal, separating the refinery from the CPC, was approved by the Cabinet in March, reportedly driven by the need for critical investments to modernise the refinery’s ageing infrastructure and in order to ensure operational efficiency for the next 25 years.
Former Minister of Power and Energy Kanchana Wijesekera announced that Expressions of Interest (EOIs) would be issued to find a suitable investment partner for infrastructure enhancement.
Additionally, plans were being explored to relocate the refinery to Trincomalee, which would involve modern facilities and an expanded tank farm.
However, Ceylon Petroleum Common Workers’ Union (CPCWU) President Ashoka Ranwala alleged that higher officials had been promised director positions in the new company, leading to their lack of opposition to the transition.
Ranwala warned that privatising the refinery could result in job losses and diminish Government control over the petroleum sector.
The Sapugaskanda facility was first commissioned in August 1969 to process Iranian light crude oil.