New Delhi, Jan. 11: Ceylon Petroleum Corporation (CPC) will hand over 100 petrol pumps to Indian Oil Corporation (IOC) within this month, Sri Lankan deputy energy minister Sagala Ratnayake assured petroleum minister Ram Naik on Friday.
IOC will then start marketing petrol and diesel in Sri Lanka from early next month. Naik is scheduled to visit Sri Lanka in April to oversee the operations.
Indian Oil was supposed to have entered Sri Lanka late last year. The project was delayed as CPC did not offer enough well-located pumps. IOC could not risk getting saddled with filling stations in remote locations with low sales.
IOC is interested in petrol pumps in the major Sri Lankan cities of Colombo, Jaffna, Candy and Galle. These pumps will be bought from CPC, which has around 800 of them.
The valuation of filling stations had got off to a slow start. The Sri Lankan government also wants to bring in another multinational company for running some of the filling stations.
Eventually three companies will compete for the retail petroleum goods market valued at around Sri Lankan Rs 60 billion.
The venture forms part of the Indian economic diplomacy. The Indian oil major will provide the latest technology to upgrade retailing operations in Sri Lanka.
IOC has also hammered together a Rs 20-crore plan to get the strategic oil tankage at Trincomalee in Sri Lanka back into operation for the first time after World War II, when the British used it to fuel Royal navy vessels. This is an offshoot of the Rajiv Gandhi pact.
Currently, CPC operates only 15 of the 100-odd tanks at Trincomalee. Due to CPC’s limited scale of operations the company has to incur high costs as a result of which the fuel sold is very expensive.
Ships, therefore, take only small fills of around 25 tonnes so that they can reach the nearest port. This amount could go up to 200 tonnes per ship once IOC starts commercial operations and brings in petroleum products from its Chennai refinery.