By A year after crisis-hit Sri Lankans stood in long queues outside fuel stations, foreign oil companies will be able to sell fuel in the island nation at a lower rate than what the state-owned oil firm sells at.
On March 27, the Sri Lankan cabinet decided to grant licenses to foreign oil companies to sell oil in the domestic retail market. Three companies—China’s Sinopec, United Petroleum of Australia, and RM Parks of the United States, in collaboration with Shell—will soon start operating in the country.
These companies will be allowed to import, store and distribute petroleum products for 20 years. They will be allowed to operate 150 fuel stations that are currently run by the state-owned Ceylon Petroleum Corporation. Moreover, they will establish 50 fuel stations at new locations.
The entry of Chinese, American, and Australian oil firms in Sri Lanka is significant, as the island nation only has two major oil companies. Ceylon Petroleum Corporation, which is owned by the government, controls 80 percent of the fuel supply, while the Sri Lankan subsidiary of the Indian Oil Corporation, Lanka IOC, controls the rest.
