Amidst protests from registered oil suppliers of the Ceylon Petroleum Corporation (CPC), Sri Lanka has finalized a deal to import refined petroleum products from Vietnam over the next six months under a government-to-government contract.
Petroleum Industries Minister Susil Premajayantha said the state-run CPC would buy refined fuel from Viet Petrol Co. Ltd under an agreement signed between Vietnam and Sri Lanka during an official visit by Vietnam President Truong Tan Sang to Sri Lanka in October last year.
The minister said that Viet Petrol had agreed to sell fuel at a price lower than the spot market price.
Meanwhile, oil suppliers registered with the CPC have expressed concern over the move saying the CPC was planning to allow a single supplier to monopolise imports under the cover of the Iranian fuel crisis. It was like fishing in troubled waters, a local agent of registered foreign oil supplier said.
According to officials, Sri Lanka will purchase petroleum products worth US$ 500 million from Vietnam under the contract. Vietnamese diplomatic sources expressed the belief that the oil deal would help both countries reach the bilateral trade target of $1 billion this year.
A senior official said the CPC had devised a contingency plan anticipating a future oil crisis in view of the United States sanctions on Iran.
Accordingly, the CPC would directly contact and place orders with state-owned oil firms in other countries. The practice of calling for bids through local agents of foreign suppliers would be suspended, if the negotiations with oil producing countries bore fruit, he said.
Local agents of registered supplies said there were 17 such suppliers who paid annual registration fees of $1,000 to the CPC and asked how they could be overlooked by the government.