Private sector to import, refine and distribute fuel

Cabinet approves energy minister’s proposal; CPC Act to be amended

The Government has decided to open to the private sector the business of supply, refining and distribution of petroleum products which are at present handled by the Ceylon Petroleum Corporation (CPC).

Accordingly, the Government has decided to amend the Petroleum Corporation Act No. 28 of 1961 so that the authority of granting permission for such operations will be entrusted to the minister in charge of energy.

The proposal was submitted by Energy Minister Udaya Gammanpila to the cabinet.

According to the Cabinet paper, any party selected after following a proper procedure could be given permission to import, refine and distribute petrol, diesel, kerosene, Furnace oil, Petroleum products and alternative fuel.

Justifying the amendment, the Cabinet paper said that according to the 1961 Act, the CPC held the monopoly on oil imports, refinery and distribution, but under a 2002 Special Act, the Lankan Indian Oil Corporation was also granted permission.

However, since the Act was not effective now, the original Act needed to be amended to grant permission for competitive institutions to take part in import, refining and distribution, the proposal noted.

At present, the CPC is working on a proposal to establish a new refinery on a Build Operate and Transfer basis with a capacity of refining 100,000 barrels a day, but according to the Act the CPC does not have permission to enter into a joint venture or invite a competitor.