Colombo | Cash-strapped Sri Lanka has signed a long-term agreement with Chinese oil and gas giant Sinopec on important storage, distribution and sale of petroleum products in the island nation, President Ranil Wickremesinghe's office said on Monday.

The deal with Sinopec-- a state-owned Chinese company --was reached months after the two sides commenced their negotiations and Sri Lanka approved a proposal in March to liberalise the fuel retail marketing in the country with more players from China, Australia and the US.

The island nation's fuel retail market was a state monopoly under the Ceylon Petroleum Corporation (CPC) till 2003 when the Indian Oil Company (IOC) was allowed to operate.

"Negotiations have been completed with Sinopec Fuel Oil Lanka Ltd and its parent company in China and Singapore for a long-term contract on important storage, distribution and sale of petroleum products in the island nation," the statement issued by the president's office said.

The Cabinet had granted approval to award licenses to Sinopec, United Petroleum Australia and RM Parks of USA in collaboration with Shell Plc to enter the fuel retail market in Sri Lanka.

However, as of now, the deal has been reached with China's Sinopec only.

The energy and procurement committees had approved a recommendation to award the three companies the licenses to operate. They will be allocated 150 dealer-operated fuel stations currently run by the CPC, a state fuel entity.

The parties will be granted a license to operate for 20 years to import, store, distribute and sell petroleum products in Sri Lanka.

Debt-ridden Sri Lanka is still struggling to normalise its crisis-hit economy.

According to official figures, Sri Lanka's total debt is USD 83.6 billion, of which foreign debt amounts to USD 42.6 billion and domestic debt amounts to USD 42 billion.

In April 2022, Sri Lanka declared its first-ever debt default, the worst economic crisis since its independence from Britain in 1948, triggered by forex shortages that sparked public protests. The country also faced long queues for fuel which is still being rationed.

Months-long street protests led to the ouster of the then-president Gotabaya Rajapaksa in mid-July. Rajapaksa had started the IMF negotiations after refusing to tap the global lender for support Cash-strapped Sri Lanka has signed a long-term agreement with Chinese oil and gas giant Sinopec on important storage, distribution and sale of petroleum products in the island nation, President Ranil Wickremesinghe's office said on Monday.

The deal with Sinopec-- a state-owned Chinese company --was reached months after the two sides commenced their negotiations and Sri Lanka approved a proposal in March to liberalise the fuel retail marketing in the country with more players from China, Australia and the US.

The island nation's fuel retail market was a state monopoly under the Ceylon Petroleum Corporation (CPC) till 2003 when the Indian Oil Company (IOC) was allowed to operate.

"Negotiations have been completed with Sinopec Fuel Oil Lanka Ltd and its parent company in China and Singapore for a long-term contract on important storage, distribution and sale of petroleum products in the island nation," the statement issued by the president's office said.

The Cabinet had granted approval to award licenses to Sinopec, United Petroleum Australia and RM Parks of USA in collaboration with Shell Plc to enter the fuel retail market in Sri Lanka.

However, as of now, the deal has been reached with China's Sinopec only.

The energy and procurement committees had approved a recommendation to award the three companies the licenses to operate. They will be allocated 150 dealer-operated fuel stations currently run by the CPC, a state fuel entity.

The parties will be granted a license to operate for 20 years to import, store, distribute and sell petroleum products in Sri Lanka.

Debt-ridden Sri Lanka is still struggling to normalise its crisis-hit economy.

According to official figures, Sri Lanka's total debt is USD 83.6 billion, of which foreign debt amounts to USD 42.6 billion and domestic debt amounts to USD 42 billion.

In April 2022, Sri Lanka declared its first-ever debt default, the worst economic crisis since its independence from Britain in 1948, triggered by forex shortages that sparked public protests. The country also faced long queues for fuel which is still being rationed.

Months-long street protests led to the ouster of the then-president Gotabaya Rajapaksa in mid-July. Rajapaksa had started the IMF negotiations after refusing to tap the global lender for support