In a significant development, China’s Sinopec is set to enter the Sri Lankan fuel market as the first shipment is scheduled to arrive early next month. State Minister of Power and Energy, D. V. Chanaka, announced the news, marking a crucial step towards addressing the country’s fuel scarcity and soaring prices. The move comes amid efforts by the government to foster fuel competitiveness and stabilize the nation’s economic situation.
State Minister D. V. Chanaka stated that steps are being taken to replace the existing fuel price formula with a Maximum Retail Price (MRP) system, which will apply to all fuel companies. The MRP mechanism aims to introduce a fair and competitive market environment that benefits both consumers and the country. The government plans to implement the MRP system from August, seeking to regulate fuel prices while allowing companies the flexibility to operate within the set maximum price range.
Reflecting on the past fuel crisis and scarcity, State Minister Chanaka highlighted the challenges faced by the Ministry of Power and Energy during the country’s economic turmoil. However, thanks to the prudent economic policies of President Ranil Wickremesinghe and the management strategy adopted by Minister Kanchana Wijesekera, the situation began to improve. The introduction of the QR code system for fuel supply played a pivotal role in easing fuel queues and ensuring a steady flow of fuel to customers.
Moreover, the government’s new fuel procurement program, designed for an entire year instead of just a few months, is aimed at maintaining buffer reserves to mitigate future supply issues. By studying global practices, the country has adopted a new method where no advance payments are made for fuel imports. Instead, fuel tankers arriving in Sri Lanka are fully stocked in local warehouses, and weekly purchases are made based on available dollar reserves. This streamlined approach has eliminated risk fees and is projected to save up to 300 million dollars annually.
Additionally, the government has struck agreements with three major internationally registered fuel companies to increase competition and alleviate the dollar shortage issue. The entry of Sinopec Company into the Sri Lankan market is anticipated to bolster competitiveness further. With the MRP system in place, the Ministry of Power and Energy will regulate the maximum retail price, while companies can offer fuel at prices within the set range, creating a competitive environment that is expected to lead to reduced fuel costs for consumers.
In the mean time, Gautham Adani gave a commitment to complete work on the 500 MW Solar and Wind project in Mannar and Pooneryn by January 2025, Power and Energy Minister Kanchana Wijesekara said yesterday.
The Minister said Adani gave the assurance during a meeting with a delegation led by President Ranil Wickremesinghe in India.
He tweeted that MOUs on Renewable Energy Cooperation, and Trincomalee Energy hub development were entered into during the visit and the energy permit for the Sampur Solar Park was issued for the joint venture between CEB and NTPC of India to commence work.
India-SL grid connectivity, Green Hydrogen, oil pipeline connectivity and energy sector investments were also discussed during the discussions held with Indian Prime Minister Narendra Modi, President Droupadi Murmu, Senior Govt officials and investors,” he said