Foreign fuel distributors in dilemma

• Loopholes in agreement signed during Kanchana Wijesekera’ s time tightens CPC in addressing concerns
• Shell-RM Parks mulls legal action against 20 dealers   
• United Petroleum finds unhealthy market conditions   
• Sinopec successful 

By Kelum Bandara   

The US-based petroleum products distributor ‘Shell-RM Parks’ which entered Sri Lanka’s retail market by running dealer-operated filling stations is now involved in a dilemma since some dealers are non-cooperative, and the Ceylon Petroleum Corporation (CPP ) finds it impossible to intervene due to loopholes in the agreement signed during the time of former Minister Kanchana Wijesekera, an official said.  
The company signed a 20-year agreement to import, distribute and sell petroleum products through 150 fuel stations allocated from CPC.   
Current CPC Chairman D.A. Rajakaruna told Daily Mirror that 150 filling stations had been assigned but around 20 dealers who own them had declined to proceed with the agreement   
He said the CPC had no way to intervene in this case, and therefore the company should seek redress through legal means only.  
“They have to resolve it with the dealers concerned. At that time, the agreement has been forced upon them. If they violate the agreement and we stop fuel supply, it will only lead to shortages in the places where these filling stations are,” he said.  
During the time of the last government, China’s Sinopec and Australia’s energy giant United Petroleum also entered Sri Lanka to run business through dealer-operated filling stations.   
Mr. Rajakaruna also said United Petroleum cites difficulties in running operations .   
“Our market size is not big enough for them to supply fuel at competitive rates, “ he said.  
However, he said Sinopec had been successful.  
“Sinopec secured the support of dealers of the stations assigned to them. Besides, it built 50 stations of their own. We will decide on places according to a scientific study which is now underway at the Moratuwa University,” he said.