Ceylon Petroleum Corporation

Even after the independence in 1948, policy towards country's petroleum and gas industry had remained unchanged until the end of 1950s. In 1961, Prime Minister Sirimavo Bandaranaike (1960–65) launched in Act. No. 28 of 1961 to bypass the monopolistic pricing imposed on OPEC oil imports, allowing Sri Lanka to import oil from the UAE and the former Soviet Russia. After established CPC Prime Minister Sirimavo Bandaranaike nationalizing the Anglo–Dutch operating companies. (Shell and BP)

In 1968, company build new Refinery increased to 38,000 BPD.[7]

Form 1969, it became possible for foreign petroleum companies to do business in Sri Lanka within a partnership with National Iranian Oil Company. Sapugaskanda Refinery was built by Iran under the guidance of the CPC in August 1969 Sapugaskanda establishment of JET A1 producing unit in the late 1980s. It is the single largest oil refinery of Sri Lanka.[8]

In the mid 1970s, the company began to sell LPG cylinders to homes in Colombo and further expanded its delivery network.

CPC accounts for more than half of Sri Lanka's petroleum products market share, 60% national refining capacity. CPC own and operate single refineries with a combined refining capacity of 50,000 barrels (7,900 m³) per stream day.[9]

Since th 1970s, CPC being the monopoly operator in the Island wide market was able to enlarge the portfolio of its operation; importation of crude oil and refined oil, storage and distribution and retail trade. Besides, many products were added to the distribution and retail trade by CEYPETCO: agrochemicals, chemical fertilizer, LPG, Naphtha, synthetic fiber. With the refinery operation, bitumen for road construction was partly supplied by CPC. Further, sale of lubricating oil and bunkering oil for sea vessels was found to be increasingly profitable for CPC by the late 1970s.[7]

Between 1977 and 1994 the country came under UNP rule in which under President J.R Jayawardana Sri Lanka began to shift away from a socialist orientation in 1977. Since then, the government has been deregulating, privatizing, and opening the economy to international competition. Post 1977, private sector activity in lubricant, synthetic fiber and bunkering oil subsectors was allowed under privatization on an initiative taken on the early 1980s. In addition, operation of LPG importation and distribution was also allowed later in which retail sales have been undertaken by entities outside CEYPETCO. In late 1996 Royal Dutch Shell purchased 51 percent stake in the CPC's LPG division for US$ 37 million. Ten years after government brought back majority stake for US$ 63 million as a part of its wider policy of President Mahinda Rajapaksa’s re-nationalization.[10]

In 1978, the company expanded its business into manufacture of Nylon 6 yarn for textile, tires and fishing industries. In1979, capacity of the Refinery increased to 50,000 BPD by increasing the crude distiller capacity.[7]

On October 20, 1995 Suicide cadres of the LTTE attacked the oil storage complexes at Kolonnawa and Orugodawatta. They managed to blew themselves up destroying the tanks. 22 security personnel died by this attack and petroleum oil worth over US $10 million were destroyed.[11]

In 2003 to bring in another participant into the petroleum industry's key products market with a view to increase competition. Accordingly, the Lanka Indian Oil Company (LIOC) was set up and allowed importation and retail distribution of key petroleum products: diesel, petrol and bitumen.[12]

CPC's has been providing electricity generating entities with relevant categories of oil for electricity generation for decades. Electricity generation on oil occupies an increasing proportion since the 1990s, as the increase of demand for electricity has to be met from the thermal power. Ceylon Electricity Board (CEB) has a debt of up to Rs. 500 billion due to be paid to CPC.[13]

Ceylon Petroleum was Sri Lanka's largest company by revenue. But now the company is reporting loss in several million rupees.[14] On April 2020 Ceylon Petroleum Corporation lost Rs. 45.1 billion first quarter. Company total debt rising 1,158.7 billion.[15]

Import expenditure on petroleum in 2021 was US$ 3.9 billion against US$ 1.7 billion in 2019. They represented 25 percent and 20 percent from the total import expenditure in the respective years. This is not different from the ratio that existed in the late 1970s which was around 25 percent of the value of total imports.[16] On November 14, 2021 Sri Lanka Government shut down the Sapugaskanda oil refinery because paucity of dollars to import crude oil. The Sapugaskanda is 51 years old and it produces 37 percent of Kerosene (Furnace oil), Naptha 19 percent Jet fuel and 43 percent Petrol and Diesel.[17] Government receive US$ 1 billion loan from Central Bank of Qatar to buy fuel and boost foreign reserves, which dropped to US$ 2.27 billion at the end of October 2021. During the fist nine months of 2021, CPC spend US$ 692 million on fuel imports.[18]

• Official website