August 8, 2022
2 mins read

China oil giant likely to enter Lankan market

This comes as Sri Lankan Cabinet Ministers in the month of June approved a proposal to allow more companies from oil-producing nations to import oil and start retail operations in Sri Lanka….reports Asian Lite News

As Sri Lanka continues to remain in the Chinese debt trap, the biggest petrochemical company in China, Sinopec, is likely to start retail operations in the Lankan fuel market, local media said citing sources.

The sources said that Sinopec is likely to enter Sri Lankan market for importing, distributing and selling petroleum products, reported Daily Mirror.

 This comes as Sri Lankan Cabinet Ministers in the month of June approved a proposal to allow more companies from oil-producing nations to import oil and start retail operations in Sri Lanka.

The proposal was tabled by Power and Energy Minister Kanchana Wijesekera.

It is pertinent to note that the economic crisis which is the worst in Sri Lanka’s history has prompted an acute shortage of essential items like fuel. Long queues at fuel stations in Sri Lanka are the new normal and prices fluctuate subject to availability.

The economy of the country is bracing for a sharp contraction due to the unavailability of basic inputs for production, an 80 percent depreciation of the currency since March 2022, coupled into a lack of foreign reserves, and the country’s failure to meet its international debt obligations.

This recent decision to let the Chinese enter in Sri Lanka’s fuel retail operations is prompted by a severe foreign exchange shortage. At present, 90 percent of Sri Lanka’s fuel supply is through the State-owned Ceylon Petroleum Corporation, and the remaining 10 percent by Lanka Indian Oil Corporation (IOC).

Sinopec is already present at the Port of Hambantota where it operates an oil depot.

Since the beginning of 2022, Sri Lanka has experienced an escalating economic crisis and the government has defaulted on its foreign loans. The United Nations warned that 5.7 million people “require immediate humanitarian assistance.”

While Sri Lanka faces its worst economic crisis since independence with food and fuel shortages, China has turned a blind eye to the crisis and shifted the blame to the borrower, a media report said.

Amid the pandemic, the country was trying to rebuild its economy, but the tourism industry was hit badly, an article in the Global Strat View think-tank read. Tourism in Sri Lanka supports 10 to 15 per cent of the economy.

The effect of the COVID-19 crisis, the loss of tourists, high government expenditure and tax cuts depleting state revenues, and the use of money for initiatives with minimal returns have all contributed to Sri Lanka’s economic meltdown.

Sri Lanka turned to China for help and asked for USD 1 billion loan to meet repayments, and a USD 1.5 billion credit line to buy Chinese goods, however, no progress was attained even after months of negotiations. (ANI)

ALSO READ: WFP worried about food security in Lanka

Previous Story

US warns Pacific islands of ‘struggle’ against coercive regimes

Next Story

Alarm bells in Lanka over China’s surveillance ship to Hambantota

Latest from -Top News

Lahore Tops World Pollution Chart

Along with Lahore, Pakistan’s Karachi also featured in the top 10 most polluted cities globally. …reports Asian Lite News Lahore, Pakistan, continues to hold the title of the world’s most polluted city.

India vigilant as Nepal faces political uncertainty

Indian agencies suspect that external elements are making attempts to create a political vacuum in the country. …reports Asian Lite News India is closely monitoring political developments in Nepal, emphasising that stability

India vows stronger maritime ties with ASEAN

Conveying Prime Minister Narendra Modi’s warm greetings on the 20th anniversary of the East Asia Summit (EAS), he said India deeply values the members’ contributions to regional peace, progress, and prosperity….reports Asian
Go toTop

Don't Miss

Turkiye, China lead exhibitors at Pakistan’s defence expo 

Inaugurated by Defence Minister Khawaja Asif, IDEAS 2024 features over

T20 World Cup: Lanka eye win against Australia

Despite the pitch having a reputation for helping the pacers,