Sri Lanka is looking at India, China and the Middle East mainly in the importation of fuel to meet the local demand opening the procurement for international firms and local agents of foreign oil companies while offering bonded ware house facilities, Energy Ministry sources divulged.
At least three suppliers affiliated with reputed international petroleum companies of oil producing countries have stepped in to import fuel; he said adding that they have been selected after the evaluation of their Expression of Interests (EOIs).
The country is expecting a diesel cargo from China to arrive by the end of November, which will help meet its needs for several months.
China has donated 10.6 million litres of diesel to farmers and fishermen in remote areas of Sri Lanka, to upgrade livelihood in the most affected sectors of agriculture and fishery.
The shipment is scheduled to arrive between November and December, according to the Chinese Embassy in Colombo.
Sinopec, the biggest petrochemical company in China, is likely to enter Sri Lankan market for fuel importing, distribution and selling petroleum products, senior energy ministry official said.
Sinopec is already present at the Port of Hambantota where it operates an oil depot. The Hambantota tank farm was issued the FSS certification (Fitness for Service) by Lloyd’s Register in April 2020 .
Petroleum Products Special Provision Amendment Bill which was passed in parliament last week will allow foreign suppliers to enter as retail operators, eliminate the monopoly of the CPC and liberalise energy sector, he pointed out.
At present, 90 percent of Sri Lanka’s fuel supply is through the State-owned Ceylon Petroleum Corporation, and the remaining 10 percent by Lanka IOC.
.The cash-strapped country is still seeking financial assistance from oil-producing countries, but has yet to secure any aid apart from an existing deal with India, Energy Ministry Kanchan Wijesekera said Tuesday on the sidelines of the ADIPEC conference in Abu Dhabi.
Sri Lanka is seeking to privatize its oil industry, but has yet to make a deal, he added. It earlier implemented a national fuel management program that helped reduce consumption by 40%, and is also still in discussions with the International Monetary Fund for financial aid, he said.
Imports of Russian oil and fuel are also still under consideration. “It doesn’t matter where it’s coming from, as long its affordable for Sri Lanka,” he added.
Energy Ministry has devised a new system to import fuel opening the importation procedure with state owned shore based storage facilities to other international oil companies or joint ventures of foreign affiliation.
The aim is to prevent the delay in clearing oil shipments at the port for several weeks due to the inability of making the payments for spot purchase owing to dollar scarcity as well as to avoid incurring massive demurrage costs from such tankers, Senior Ministry official divulged.
The selected suppliers will be given permission to use some of the storage tanks as bonded ware houses maintain fuel stocks and they will have to release it as and when CPC required it after making the payments for them
