United Petroleum slams govt. for unkept promises

• Warns policy inconsistency hurting investor confidence ​
• Hits out at government over exit delays 
• Accuses government of failing to uphold “a key undertaking from Energy Ministry”
• Says left with “no option” but to terminate exit agreement and initiate formal dispute resolution proceedings in October 2025
• Asserts had “operated in good faith” but repeated breaches and government’s subsequent delay in facilitating its exit reflect systemic policy inconsistency

United Petroleum Lanka yesterday expressed “deep disappointment” over the challenges it faced during its short-lived operations in the island nation, stating similar issues have now extended to its exit.

According to the Australian-owned subsidiary of United Petroleum Group, the government has failed to meet its obligations under a Cabinet-endorsed agreement.

In a strongly worded statement, the fuel retailer accused the government of failing to uphold “a key undertaking from the Energy Ministry”, despite the repeated follow-ups and extensions granted for completion.

The company said it had met all its obligations under the agreement but was left with “no option” but to terminate the exit agreement and initiate formal dispute resolution proceedings in October 2025.

United Petroleum Lanka entered Sri Lanka in August 2024, amid much optimism, as one of the three global players invited to reshape the country’s long-protected fuel retail market. The firm pledged US $ 27.5 million in investment, under a 20-year licence and launched operations with expectations of a liberalised, transparent industry.

However, less than five months later, the company halted its fuel supply operations in December 2024, citing the government’s failure to uphold the critical terms of its supply and distribution agreements.

United Petroleum said the persistent challenges created “an uncertain and economically unsustainable environment”, which ultimately undermined the long-term viability of its investment.

“While entry in Sri Lanka began promisingly and collaboratively, the difficulties faced prove the importance of policy consistency, openness and adherence to contractual arrangements as Sri Lanka continues to attempt to attract and retain foreign investment,” the statement said.

United Petroleum Lanka noted that although it had “operated in good faith”, the repeated breaches and government’s subsequent delay in facilitating its exit reflect systemic policy inconsistency. This is an issue that is long cited by foreign investors as a barrier to doing business in Sri Lanka.

The company stressed that it continues to be proud of its integrity and professionalism throughout both its operational and exit processes, reaffirming its adherence to international standards of corporate conduct and investor responsibility.

United Petroleum’s withdrawal, confirmed earlier by the Ceylon Petroleum Corporation officials, is a significant blow to Sri Lanka’s fuel sector reforms. The company’s exit leaves the Indian, Chinese and US entities in operation, raising renewed concerns over the credibility of the government’s ability to maintain investor confidence.