- A key condition for those entering market afresh would be to source their own forex to procure fuel supplies, without relying on local banks
China Petroleum & Chemical Corporation (Sinopec) inked the long-term contract agreement with the Sri Lankan government yesterday to enter Sri Lanka’s domestic fuel market, bringing more stability and reliability to the country’s fuel supply, the President’s Media Division (PMD) announced.
The signing ceremony took place at the Presidential Secretariat yesterday morning, with representatives from both Sri Lanka and Sinopec
in attendance.
Power and Energy Ministry Secretary M.P.D.U.K. Mapa Pathirana and Sinopec Fuel Production and Marketing Department Managing Director Chen Chengmin signed the agreement in front of President
Ranil Wickremesinghe.
The licence grants Sinopec to import, store and distribute fuel in Sri Lanka for a 20-year period while bringing in competition to the country’s duopoly retail fuel market dominated by state-owned Ceylon Petroleum Corporation (CPC) and Lanka Indian Oil Company (LIOC).
In addition, Power and Energy Minister Kanchana Wijesekera said Sinopec would also be granted a 20-year licence to operate 150 fuel stations currently operated by CPC. Further, Sinopec is set to invest in 50 new fuel stations along with other investments into the country’s energy sector.
According to the PMD, Sinopec, along with its affiliated companies, is required to commence operations in Sri Lanka within 45 days, following the issuance of the licence.
Both CPC and LIOC, which rely on the domestic banking sector, faced significant challenges in securing sufficient foreign exchange for fuel shipments, resulting in a severe fuel shortage last year.
In response to this, the Power and Energy Ministry calls for tenders from reputable petroleum companies established in oil producing countries. Accordingly, the government in April announced that China’s Sinopec, United Petroleum of Australia and RM Parks of the United States, under a collaboration with Shell PLC, had been selected to enter the country’s retail fuel market.
The PMD highlighted that a key requirement for new retail suppliers entering the market is their ability to secure forex requirements, without depending on the domestic banking sector. “It was mandated that these companies source their own funds for fuel procurement through foreign sources, at least during the initial one-year period of operation,” it said.
The government expects this initiative to translate into a more stable and reliable fuel supply, boosting the country’s energy sector and providing assurance to consumers.
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https://www.dailymirror.lk/business...nter-Sri-Lankas-retail-fuel-market/215-259684
China’s Sinopec first off the block in new fuel players league
Tuesday, 23 May 2023 00:01 - - 165
President Ranil Wickremesinghe along with Chinese Ambassador Qi Zhenhong witness the exchange of agreement signed between Power and Energy Ministry Secretary M.P.D.U.K. Mapa Pathirana and Sinopec Company Fuel Production and Marketing Department Managing Director Chen Chengmin yesterday at the Presidential Secretariat
- Signs contract with Govt. to import, store, distribute, and sell petroleum products in predetermined distribution dealer operated network
- To rely on own funds for fuel procurement through foreign sources at least during initial one-year period of operation
- Gets 20-year license to operate 150 fuel stations currently operated by CPC; to invest in 50 more new fuel stations
- Sinopec along with United Petroleum Australia and RM Parks, USA, in collaboration with Shell PLC were originally approved by Govt. following EOI and RFP process
In a significant move to address fuel supply challenges, the Government yesterday signed a contract agreement with China’s Sinopec, a leading international petroleum company.
The agreement marks a crucial step in ensuring a steady and uninterrupted fuel supply for the nation, according to a statement issued by the President’s Media. The signing ceremony took place at the Presidential Secretariat, with representatives from both Sri Lanka and Sinopec in attendance. Power and Energy Ministry Secretary M.P.D.U.K. Mapa Pathirana and Sinopec Company Fuel Production and Marketing Department Managing Director Chen Chengmin signed the agreement in front of the President.
Sinopec, along with its affiliated companies, is set to commence operations in Sri Lanka within 45 days following the issuance of the license.
Separately Power and Energy Minister Kanchana Wijesekara in a tweet said as per the agreement Sinopec will be granted a 20-year license to operate 150 fuel stations currently operated by the Ceylon Petroleum Corporation (CPC).
He added that the agreement also allows Sinopec to invest in 50 new fuel stations and to invest in Sri Lanka’s energy sector.
The President’s Media in its statement said, “This development brings hope for a more stable and reliable fuel supply, boosting the country’s energy sector and providing assurance to consumers.”
Sinopec was among shortlisted entities invited to submit detailed proposals in response to a Request for Proposal (RFP) document. The Cabinet Appointed Special Committee (CASC) and the Technical Evaluation Committee (TEC) thoroughly scrutinised the proposals and recommended awarding contracts to the following companies, subject to negotiations:
Sinopec Fuel Oil Lanka Ltd., United Petroleum Australia and RM Parks, USA, in collaboration with Shell PLC.
The Cabinet of Ministers, considering the recommendations made by the CASC and the Committee Appointed by the Cabinet, granted approval to award the contracts to the selected suppliers.
The Government said in response to the on-going foreign exchange crisis, the Power and Energy Ministry took this decisive action to ensure an uninterrupted fuel supply to consumers.
It recalled that with the inability to provide sufficient foreign exchange for fuel shipments, the Ceylon Petroleum Corporation (CPC) and Lanka Indian Oil Company (LIOC) faced significant challenges.
To tackle this issue, the Ministry explored various strategies and one of them involved inviting Expression of Interests (EOIs) from reputable petroleum companies established in producing countries. The goal was to import, store, distribute, and sell petroleum products in predetermined Distribution Dealer operated networks in Sri Lanka. The Cabinet of Ministers approved this initiative.
One of the key requirements for new retail suppliers entering the market was their ability to secure forex requirements without depending on the domestic banking sector. It was mandated that these companies source their own funds for fuel procurement through foreign sources, at least during the initial one-year period of operation.
At the signing ceremony, CPC Chairman and Managing Director, and Ceylon Petroleum Storage Terminals Ltd. Chairman participated. From Sinopec, representatives from Sinopec Fuel Oil Lanka Ltd., Sinopec Fuel Oil Sales Co. Ltd. (People’s Republic of China), and Sinopec Fuel Oil (Singapore) Ltd. were present to formalise the agreement.
Power and Energy Minister Kanchana Wijesekera, State Ministers D.V. Chanaka, Indika Anuruddha, Shehan Semasingha, President’s Senior Advisor on National Security and Chief of Staff Sagala Ratnayake, President’s Secretary Saman Ekanayake, Central Bank Governor Dr. Nandalal Weerasinghe, Chinese Ambassador Qi Zhenhong and representatives of Sinopec Oil Lanka Ltd., Sinopec China Ltd. and Sinopec Singapore Ltd. were present on this occasion.
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https://www.dailymirror.lk/business...nter-Sri-Lankas-retail-fuel-market/215-259684
