The government has decided to allow the three foreign companies entering the retail fuel market in Sri Lanka to sell fuel below the approved price of the Ceylon Petroleum Corporation.
A senior official of the Ministry of Power and Energy has stated that the contracts with the three companies will be signed by the end of this month and the companies will start operations within a month after the contracts are signed.
China’s Sinopec Company, Australia’s United Petroleum Company and Shell Company together with the United States of America’s RM Parks Company have been approved to enter the retail fuel market in Sri Lanka.
The senior official has pointed out that because the three foreign companies coming to Sri Lanka are allowed to sell fuel at less than the prescribed price, the demand for Ceylon Petroleum Corporation’s fuel will decrease and the government’s fuel bill may come down.
At present, the government spends an average of US$ 450 million per month on fuel and the Ministry of Electricity and Energy hopes that each of the three companies coming to Sri Lanka will bring US$ 120 million worth of fuel to Sri Lanka per month, which will reduce the government’s fuel bill. has been declared.
The senior official of the Ministry of Power and Energy has pointed out that this decision will affect the sale of Ceylon Petroleum Corporation’s fuel, but it will be beneficial to the consumer.
It is said that the terms of the agreement include that the companies must refrain from using local banks to find the dollars needed to import fuel and that the profits earned by the companies can only be taken out of the country after one year.
The Ministry of Power and Energy has estimated that the three companies will import US$ 2.2 billion worth of fuel into Sri Lanka per year, which will lighten the burden on the treasury.
It is stated that the agreement is for 20 years and during that period the companies must pay US$ 2 million annually as renewal fees.
Even after 20 years, the companies can continue to operate based on the agreements made through negotiations. Sources have stated that the companies will pay an amount as storage fees and the government will receive a certain percentage of a litre as revenue.
Under the agreements, the companies have also been given the opportunity to sell high-end, high-end products used in luxury vehicles. (Lankadeepa)
