US-based petroleum distributor Shell-RM Parks, which entered Sri Lanka’s retail market through dealer-operated filling stations, is facing challenges due to non-cooperation from some dealers. The Ceylon Petroleum Corporation (CPC) is unable to intervene due to contractual loopholes from an agreement signed during the tenure of former Minister Kanchana Wijesekera, a CPC official revealed.
The company entered into a 20-year agreement to import, distribute, and sell petroleum products through 150 filling stations allocated by the CPC. However, CPC Chairman D.A. Rajakaruna disclosed that approximately 20 dealers have refused to honor the agreement, creating operational difficulties for Shell-RM Parks.
Rajakaruna stated that CPC has no legal grounds to intervene and suggested that the company resolve the matter through legal channels.
“They need to address the issue directly with the concerned dealers. If we halt fuel supplies to these stations, it will only lead to shortages in those areas,” he explained.
Meanwhile, Australia’s United Petroleum, another foreign entrant, is reportedly facing challenges due to the limited market size, which makes it difficult to supply fuel at competitive rates.
On the other hand, China’s Sinopec has achieved success in the Sri Lankan market. Sinopec not only secured the cooperation of its allocated dealers but is also building 50 of its own fuel stations. Rajakaruna noted that station locations will be determined based on a scientific study currently being conducted by Moratuwa University.
