Sri Lankan government approves four long term fuel contracts

Sri Lankan government approves four long term fuel contracts

Sri Lanka’s Cabinet of Minister has reportedly approved four long-term contracts for the procurement of fuel within eight months from 1 June to 31 January 2022.
According to reports, of the total four long-term contracts, three were awarded to PetroChina International Ltd., Singapore and the balance to Swiss Singapore Overseas Enterprises Ltd.
The four long-term contracts were to import of 2,700,000+10-5% barrels of Petrol (92 Unl) to Swiss Singapore Overseas Enterprises Singapore; import of 1,120,000+10/-5% barrels of Diesel (maximum percentage of Sulphur 0.05) to be unloaded by Muthurajawela SPM to PetroChina International Singapore; import of 1,341,000+10/-5% barrels of Petrol (92 Unl) and 459,000+10/5% barrels of Petrol (95 Unl) to PetroChina International Singapore; and import of 1,200,000+10/5% barrels of Diesel (maximum percentage of sulphur 0.05) to be unloaded across Colombo Dolphin Tanker Berth (DTB) and Muthurajawela SPM to PetroChina International Singapore, the Daily FT has reported.
The proposal submitted by Sri Lanka’s Energy Minister to award the four long-term contracts was on the recommendations of the Special Standing Procurement Committee appointed by the Cabinet.
The Cabinet Sub-Committee chaired by Sri Lanka’s Prime Minister Mahinda Rajapaksa had last month discussed the rapid increase in fuel prices in the world market compared to 2019 and 2020.
The Cabinet had also approved last week amendments to the CPC Act No. 28 of 1961 in a bid to renew its efforts to expand refinery capacity and boost efforts to build new refinery in the coming years.
“To increase our current output of 38,000 b/d to 45,000 b/d, and to build a new refinery with a capacity of 100,000 b/d, we needed to revise certain provisions of the existing CPC Act,” Co-Cabinet Spokesman, Minister Udaya Gammanpila told journalists last week.

OSL take:

Sri Lanka’s ongoing development programme and the increasing energy demand due to economic expansion have opened up business/investment opportunities in the country’s energy sector. With Sri Lanka fast becoming a business hub in the South Asian region given it’s geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country, foreign businesses/investors could explore business/investment opportunities in the country’s energy sector.

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Article Code : VBS/AT/09062021/Z_6

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