• Govt. holding final round of negotiations with new entrants
• New entrants won’t be allowed to sell above Govt. prices

 Sri Lankan authorities are waiting for the foreign companies that have been finalised for the awarding of licences to enter into the country’s petroleum business to declare their prices, The Sunday Morning learns.

It is reliably learnt that the final negotiations are currently being conducted by Sri Lanka with the companies and once the negotiations are completed, the fuel prices of each company will be declared.

A senior Government official who wished to remain anonymous told The Sunday Morning that the companies would be allowed to come up with a cost-reflective price for petroleum products and that the price should not exceed the price that had been declared by the Government at present.

The Cabinet has granted approval to award licences to China’s Sinopec, Australia’s United Petroleum, and RM Parks of the US, in collaboration with multinational oil and gas company Shell PLC, to enter the fuel retail market in Sri Lanka.

They will be granted licences to operate for 20 years to import, store, distribute, and sell petroleum products in Sri Lanka and 150 fuel stations will be allocated to the three companies to run their operations.

The Government anticipates entering into long-term contracts with the Ceylon Petroleum Corporation (CPC) to ensure a continuous supply of petroleum products to Sri Lanka, whilst engaging in business using existing fuel stations owned or to be opened by the CPC as well as the infrastructure facilities of the Ceylon Petroleum Storage Terminals Ltd. (CPSTL), based on a facilitation fee.

As per the initial plan announced by the Government, the foreign firms must ensure that all products comply with all Sri Lankan quality standards and parameters of petroleum products. 

The Power and Energy Ministry will also facilitate the development of new fuel stations and storage terminals depending on the requirement of the company post commencing operations in Sri Lanka.

Initially, in October last year, Sri Lanka shortlisted 13 foreign companies following the evaluation of all 26 proposals received in response to the Expressions of Interest (EOIs) called by the Government from reputed companies established in petroleum-producing countries for importation, distribution, and selling of petroleum products in Sri Lanka on long-term agreements.

The decision to open the petroleum market for more foreign players came as the Government struggled to secure close to $ 500 million monthly to import fuel amidst the worst foreign reserves and currency crisis faced by the country.

The EOIs were requested in July and it was said that the Power and Energy Ministry had received proposals from companies interested in the petroleum business based in India, the UAE, Saudi Arabia, the US, China, Russia, the UK, Malaysia, Norway, and the Philippines.

The process was supposed to be completed last year, but it has been delayed for more than six months due to reasons not known to the public.