US-based RM Parks to start fuel supply in Sri Lanka soon
By: Staff Writer
Colombo (LNW): A U.S. based Petroleum Company is set to enter into Sri Lanka petroleum retail market soon 52 days after Chinese company Sinopec launched its operations on August 30th by forming Sinopec Fuel Oil Lanka as the local subsidiary of the Chinese company
US-based RM Parks signed an agreement with Sri Lanka on June 8 allowing it to import and sell fuel in the country, less than a month after Chinese petroleum giant Sinopec also acquired rights to enter the retail market, as the Indian Ocean nation grapples with an economic and energy crisis.
The United States-based RM Parks has deposited a required performance bond and the first shipment may arrive in Sri Lanka within the next two months, while the launching of United Petroleum Australia is facing delay, the State Power & Energy Minister D V Chanaka said.
Sri Lanka in July this year awarded retail fuel licenses to three foreign firms, namely, China’s Sinopec, United Petroleum Australia and US-based RM Parks to reduce the state-owned Ceylon Petroleum Corporation’s (CPC) pressure on finding foreign currency for the country’s whole fuel import.
“As of now, RM Park has already deposited a $1 million performance bond. They have informed us that they will deposit the $2 million license fee in the next week,” D V Chanaka said on Thursday (19).
“They need to bring the first shipment within 45 days from the day they pay the license fee.”
Sinopec is already importing fuel for $40 million monthly and if all three start operations in its full potential, the government can save up to $1.5 billion from fuel imports, he said.
The government has imposed conditions for all the three fuel retailers to use foreign currency from their mother company for imports while banning the repatriations of foreign currency from Sri Lanka.
United Petroleum Australia, the third new fuel retailer, however is facing a delay after a request in contrary to the earlier conditions.
Confirming the development Sri Lanka’s Minister of Power and Energy Kanchana Wijesekera said at that time the Cabinet had approved the awarding of licenses to Sinopec, United Petroleum, Australia and RM Parks, U.S.A, in a collaboration with Shell plc, to enter the retail market in Sri Lanka.
The three companies will each be allocated 150 dealer-operated fuel stations, currently operated by the state-owned Ceylon Petroleum Corporation, and obtain 20-year licences to import, store, distribute and sell petroleum products in Sri Lanka. A further 50 fuel stations will be established at new locations by each company, the Minister said.
The move is aimed at diversifying Sri Lanka’s retail fuel market that is currently a duopoly, with the state-owned CPC and Indian Oil Corporation subsidiary Lanka IOC, which controls a third of the market.