Challenges Faced by Shell-RM Parks and Other Fuel Distributors in Sri Lanka

The US-based petroleum company, Shell-RM Parks, is facing challenges in Sri Lanka. The company, which signed a 20-year agreement to import, distribute, and sell fuel through 150 stations provided by the Ceylon Petroleum Corporation (CPC), is struggling because some dealers are refusing to cooperate.

CPC Chairman D.A. Rajakaruna explained that around 20 of these dealers have declined to follow the agreement. Since the CPC cannot intervene due to flaws in the contract signed under former Minister Kanchana Wijesekera, the company must resolve the issue through legal means.

Stopping fuel supply to these stations would only cause shortages in those areas.

Similar challenges are faced by United Petroleum, an Australian energy company that also entered Sri Lanka under the previous government. They find it hard to operate because the market is too small to offer fuel at competitive prices.

In contrast, China's Sinopec has been successful. It has gained the support of its dealers and is building 50 new stations on its own, with locations chosen based on a study by Moratuwa University.