Photo: LIOC Managing Director M. Nageswaran (right) shakes hands with Treasury Secretary Charitha Ratwatte whilst handing over the cheque for $45 million watched by Economic Reforms, Science and Technology Minister Milinda Moragoda, CPC Chairman Wimalasena and Indian High Commission’s Economic and Commercial Counselor
V. Ashok yesterday.

Lanka Indian Oil Company (LIOC) yesterday paid the US$ 45 million ahead of the stipulated period of 30 days enabling the government to formally approve its status as the second player in the petroleum sector.

The agreement signed last month along with advance payment of US$ 30 million out of total consideration of $ 75 million also provide it with the license to import, store and distribute petroleum products as the second player, acquire one third of the common user facility etc.

“With this, the transaction relating to the entry of LIOC as the second player into the petroleum retailing sector is now successfully concluded.  The process relating to the identification of a third player has progressed to its final stages,”  Public Enterprises Reform Commission (PERC) sources said.

The balance payment was made by LIOC Managing Director M. Nageswaran to the Secretary to the Treasury Charitha Ratwatte yesterday in the presence of Economic Reforms, Science and Technology Minister Milinda Moragoda.

Ministry Secretary to G. Hewagama, Ceylon Petroleum Corporation Chairman Daham Wimalasena, Public Enterprises Reform Commission (PERC) Chairman Chrishantha Perera, IOC Company Secretary R. Nagendra also participated at this.

Two directors to the 100 petrol sheds owning company Independent Petroleum Marketers Ltd., which the LIOC took over has been appointed.  They are Mr. Nageswaran and Somesh Jhingon.  Treasury also transferred one third  of the shares of the Common User Facility company along with the registration of its shares.  Eight of the nine directors of the common user facility company The Ceylon Petroleum Storage Terminal Ltd. (CPSTL) were also appointed.  They are Treasury nominees N. Pathmanathan, S. Gunasena, Dr. R.M.K. Ratnayake, CPC nominees D. Jayamaha, G.C.E.B. wijeyesinghe and Lalith Wickramasinghe and LIOC nominees Mr. Nageswaran and S. Shrinivasan while one more nominee of its has to be named.

In keeping with the government’s policy of liberalizing the petroleum sector, the PERC conceptualized a model for restructuring the CPC in 2002.  Accordingly, the market is to be partially liberalized by allowing 3 players into the down stream petroleum retailing in Sri Lanka.  The Government invited IOC to be to second player and a 3rd player is currently being identified through a competitive process.