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Two of the foreign companies that are planning to enter Sri Lanka’s retail fuel market have proposed to set up all-purpose fuel stations complete with car wash, service areas, shops and motels and will be entitled to provide fuel without QR code systems.

The proposal came up during recent discussions between government officials and representatives of the two companies — China’s state-owned Sinopec and United States-based RM Parks-Shell.

A senior Power and Energy Ministry official told the Sunday Times the government was agreeable to the proposal, which would mainly apply to fuel stations in outstation areas.

Government officials also conveyed to the companies that they could be exempted from having to issue fuel under the prevailing QR quota system, the official said.

“They want to build fuel stations in the mould of modern business centres, making them not just places where you go to obtain fuel. They want to have areas where you can wash and service your car, and even spend the night if you are going on a long trip,” the official said.

The normal area of a fuel station is about 40 perches, but the proposal is to give the companies about 1 ½ acres for each such station. The plan will mostly apply to outstation fuel stations. In Colombo, it will be on a case-by-case basis based on the availability of land, according to the official.

Agreements with the two companies are expected to be signed early next month.

The government also hopes that once the companies enter the Sri Lankan market, they will also introduce higher-quality fuels and lubricants to the country.

A third company, United Petroleum of Australia is also expected to enter the Sri Lankan fuel retail market soon.

The Ministry estimates that the three companies collectively would be importing fuel to the tune of US$ 2.2 billion a year and this would reduce the burden on the Treasury.

The official said the agreements with the three companies would cover 20 years while the annual renewal fee of US$ 2 million would also be charged. After 20 years, the companies could continue operations, subject to negotiations. Each company will be allowed to operate 150 sheds, with each being permitted to operate another 50 fuel stations later.


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