The delay in the valuation of assets to be handed over to the Indian Oil Corporation (IOC) has pushed the commencement of India’s only Fortune 500 company and industry giant’s Lankan operations for February 2003.

IOC Chairman M.S. Ramachandran had conveyed this during a meeting with Economic Reforms, Science and Technology Minister Milinda Moragoda recently.

According to a press release issued by the Ministry yesterday Mr. Ramachandran had said that IOC’s investment, estimated to be US$ 65 million has been postponed till February 2003 since the values of the assets to be empowered is not yet estimated.

The IOC chief had said also pointed out that if government allows to initiate the project immediately with a US$ 2 billion insurance, it will enable to terminate the monopoly in petroleum sector in Sri Lanka.

Minister Moragoda in response had said that he would inform the Public Enterprises Reforms Commission (PERC), which comes under him, to find avenues to agree with this proposal.  He also said that the government intends to provide jobs by initiating enterprises and to provide petroleum to people for competitive prices.

The press release also said that Mr. Ramachandran had stressed the need for IOC to enter the lubricant market as well and had said that they have already done a feasibility and intend proposing this to the Government.  The meeting between the IOC officials and Minister Moragoda was to discuss the progress of their investments in Sri Lanka and some problems they have confronted during this work.  IOC will be the second entrant to the petroleum market.

It is a world famous company of “Fortune 500” category under the Indian administration and hopes to distribute pertroleum in Sri Lanka initially by taking over 100 petrol stations of the Ceylon Petroleum Corporation.

Recently an agreement was signed as a strategic investment between the two countries and accordingly two oil tanks in Trincomalee along with 100 stations are to be vested with IOC.

The Ministry said that the Government expects these investments will enable Sri Lankan users to buy petroleum at the same price as in the world market.  Also it is expected to reduce the energy expenditure of industrial enterprises.

It said that elaborate discussions were carried out regarding the present status of the world petroleum industry, its competitiveness, and what measures are taken by this company to overcome these challenges.  The IOC chief has also disclosed that the company would establish a network of independent petrol stations countrywide as the second step of its investment.