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CHINESE petroleum giant Sinopec signed an agreement with Sri Lanka on Monday to enter the retail fuel market.
The South Asian island has struggled to resolve a worsening energy crisis amid an unprecedented economic crisis.
Following an agreed IMF bailout tied to spending cuts, the deal with Sinopec suggests Colombo is seeking to counter the IMF with support from Beijing.
The contract enables Sinopec to import, store, distribute and sell petroleum products in Sri Lanka, which has had a fuel shortage for more than a year.
It would “ensure uninterrupted fuel suppliers to consumers,” the president’s office said in a news release.
Under the pact, Sinopec will be granted a 20-year licence to operate 150 fuel stations currently operated by Sri Lanka’s state-run Ceylon Petroleum Corporation and to invest in 50 new fuel stations and in the country’s energy sector, the nation’s Power and Energy Ministry said in a statement.
When the economic crisis hit Sri Lanka last year, the government couldn’t find foreign currency to import fuel, triggering a severe shortage that lasted for more than two months.
Sri Lanka’s economic crisis resulted in severe shortages of essentials such as medicines, fuel, cooking gas and food, leading to angry protests that forced forced president Gotabaya Rajapaksa to flee Sri Lanka and resign last summer.
