Sri Lanka’s LIOC granted permission to open 50 additional fuel stations.
The Morning: The Lanka Indian Oil Company PLC (LIOC) has been granted permission by the Ministry of Power and Energy to open 50 new fuel stations islandwide amidst the current fuel shortage, with these filling stations expected to be fully operational in three months or more.
This announcement was made yesterday (8) by LIOC Managing Director Manoj Gupta on Twitter, where he expressed gratitude to the Government of Sri Lanka for the permission to open these filling stations.
Speaking to The Morning, Gupta said that the locations of the new stations will be decided only after a stringent evaluation process.
“We just received permission and we still haven’t decided on where the stations will be set up. We will be putting out an advertisement for applications, and once dealers apply, we will have a stringent process of evaluating the location and financial status of the dealer, as well as land area. This process will take some time; in my opinion it will take at least another three months for operations to begin,” he said.
Gupta added that much of the investment will come from LIOC, while the land would need to be owned or held on lease by the dealers who apply, and the infrastructure provision would also be the responsibility of the dealer.
Speaking to Reuters, Gupta had said that LIOC, the smaller player in Sri Lanka’s fuel supply duopoly, currently has 216 fuel stations and will invest about $ 5.5 million on the expansion.
“We have been trying for some time to obtain this approval and we are more than willing to come forward and play a larger role to support and work with Sri Lanka to resolve its challenges,” he had said.
The Cabinet of Ministers in late June granted approval for private companies from oil-producing countries to enter the Sri Lankan market for the import and retail sale of fuel.
“Cabinet approval was granted to open up the fuel import and retail sales market to companies from oil producing nations. They will be selected on the ability to import fuel and operate without foreign exchange requirements from the Central Bank of Sri Lanka (CBSL) and banks for the first few months of operations,” Minister of Power and Energy Kanchana Wijesekera posted on Twitter on 28 June.
However, Wijesekera reiterated that the Ceylon Petroleum Corporation (CPC) will continue to work as the service provider for logistics, stocking, and distribution for a service fee that is to be charged from the said companies.
“Selected outlets of the existing 1,190 CPC outlets, as well as new outlets, will be made available to the Lanka Indian Oil Corporation (LIOC) and the new companies that are selected. The Sapugaskanda Oil Refinery will be operated by the CPC,” he said.
The ongoing power and energy crises in Sri Lanka has opened a host of new business/investment opportunities in the country’s power and energy sectors. The government of Sri Lanka has decided to open up the country’s local fuel sales enabling foreign businesses to enter the local energy market. The Lanka Indian Oil Company (LIOC) had been granted an additional 50 fuel stations island wide as part of this programme. LIOC has also posted a continuous growth momentum and recorded impressive profits through its operations in Sri Lanka indicating the increasing business potential in the local fuel market. Therefore, apart from looking at opportunities to supply fuel to the local fuel market through the Sri Lankan authorities, foreign businesses engaged in the energy sector could look at running its own operations in the local fuel market.
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