COLOMBO, May 22 (Xinhua) -- In a significant move to address fuel supply challenges, Sri Lanka signed a contract agreement on Monday with Sinopec, a leading international petroleum company, said the President's Media Division (PMD).
The PMD said in a statement that the agreement marks a crucial step in ensuring a steady and uninterrupted fuel supply for the nation.
With the inability to provide sufficient foreign exchange for fuel shipments, the Ceylon Petroleum Corporation and Lanka IOC, the only two players in Sri Lanka's market, faced significant challenges, said the PMD.
Sri Lanka explored various strategies and one of them involved inviting expression of interests from reputable petroleum companies established in producing countries, to import, store, distribute and sell petroleum products in the country, according to the PMD.
The PMD said 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.
Minister of Power and Energy Kanchana Wijesekera said in March that Sri Lanka's cabinet has agreed to award licenses to three foreign companies that intend to enter the fuel retail market in the country.
The foreign companies including China's Sinopec will be each allocated 150 dealer-operated fuel stations that are currently operated by the state-owned Ceylon Petroleum Corporation.
The companies will also be allowed to establish 50 new gas stations each in new locations. ■
