Sri Lanka to slap maximum retail price for fuel

Three wheeler drivers wait in line to top up their tanks at a Ceylon Petroleum Corporation fuel station in Colombo, Sri Lanka February 21, 2022. Credit: Reuters File Photo

The Sri Lankan government would introduce from next month a maximum retail price for fuel, State Minister of Energy DV Chanka said on Sunday.

Speaking to reporters, Chanaka said that the Maximum Retail Price (MRP) would be set as per the pricing formula of the government.

"The government would introduce a maximum retail price for fuel. Based on the pricing formula we will set a MRP," Chanaka said.

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The move of the Sri Lankan government comes even as Chinese energy company Sinopec is set to enter the retail fuel market for the first time in August.

Chanaka said that the three players in the fuel retail market, the state-owned CPC, LIOC, the local operation of the Indian Oil Company and Sinopec would then be operating under the MRP.

"This would make the consumer benefit from competition," Chanaka said.

Sinopec, the Chinese energy company, is to enter the retail fuel market for the first time in August, Chanaka said.

“Their first shipment is due on August 3," he said.

Sinopec has followed the LIOC to become the third player in the local fuel retailing operations with an investment of 100 million dollars for import, storage, and sale of fuel.

They are to take over 150 privately-owned fuel outlets currently managed by the Petroleum Corporation, as well as setting up 50 new fuel stations.

Meanwhile, the energy ministry official said the LIOC had made a proposal for an oil distribution pipe line connecting Nagapatnam, Trincomalee and Colombo. The project feasibility is currently being discussed.