Following the enactment of the Petroleum Products (Special Provisions) Amendment Act in October last year, the basic agreement of restructuring the Ceylon Petroleum Corporation (CPC) based on a proposal by the Asian Development Bank (ADB) in 2001 has been breached, it is learnt.

The Act allowed international petroleum product retail suppliers to enter the local market.

Accordingly, it was reported that if China or India go to court, the CPC will face a serious crisis.

When questioned by the Sri Lanka Mirror, Cyril Suduwella, who is an expert in the petroleum sector, also confirmed this.

He pointed out that the new Act has breached the basic ADB agreements of bringing the CPC affairs under an independent regulatory body and dealing with stakeholders in the petroleum sector in a fair, just and equitable manner.

According to these proposals, the Kolonnawa Oil Terminal has been established, where three parties have been given the opportunity to distribute and sell fuel in the country.

Accordingly, the CPC, Indian Oil Company and a Chinese company named ‘China Sinopec’ have been given this opportunity.

However, China Sinopec has not started its operations in Sri Lanka even though it has been given permission.

Accordingly, more than 100 filling stations that were given to this company have been placed under the purview of the Treasury.

Power and Energy Minister Kanchana Wijesekera submitted the Petroleum Products (Special Provisions) Amendment Bill to the Cabinet last year. The Bill was passed in Parliament on October 26 last year.

The proposal made by the ADB 21 years ago said the regulation of petroleum should be done by an independent regulatory body under the minister in charge. However, it is said that these proposals have been violated by the amended Act.