SJB opposes Govt. decision to extend IOC’s petroleum licence

Monday, 30 October 2023 00:16 - - {{hitsCtrl.values.hits}}

SJB’s Mujibur Rahman questions Govt. on basis under which licence renewal was granted
Says deal lacks a competitive tender process and lacks transparency
Questions if renewal of licence was agreed between President and Indian PM Modi
Stresses Subject Minister owes an explanation on how licence was renewed

SJB Deputy General Secretary Mujibur Rahman

The main opposition party Samagi Jana Balawegaya (SJB) yesterday expressed its strong opposition to the Government’s decision to extend Lanka IOC’s petroleum licence for an additional 20 years.

Speaking at a press conference held at the opposition leader’s office in Colombo, SJB Deputy General Secretary Mujibur Rahman raised questions regarding the basis on which the licence renewal was granted by the Government.

Rahman pointed out that the agreement with Lanka IOC was originally established in 2001, granting the entity hefty tax concessions and a 20-year licence to operate in Sri Lanka in exchange for $ 70 million investment. “The agreement was struck without a competitive tender process and lacked transparency,” he remarked.

The SJB politician noted that over the years Lanka IOC has obtained a net profit of $ 3 billion from its operations in Sri Lanka. He noted that the Government has now once again renewed Lanka IOC’s petroleum licence under the same favourable tax concessions and benefits for yet another 20 years.

“Once again, there was no competitive tender process or transparency. Are we obligated to grant this deal to the IOC? Was this agreement secretly negotiated between President Ranil Wickremesinghe and Indian Prime Minister Narendra Modi?” he asked.

He raised concerns about whether the cabinet had thoroughly examined Lanka IOC’s two-decade presence in Sri Lanka before consenting to the renewal. Rahman also criticised the relevant Minister for not presenting a comprehensive review and the particulars of the deal in parliament.

Rahman pointed out that IOC was unable to address the fuel shortages during Sri Lanka’s most severe crisis or provide better prices to the public. “The public deserves to know the rationale behind this renewal. Instead, the government has discreetly extended their licence once again,” he emphasised.

The Government last week renewed the Petroleum Products License granted to Lanka IOC – the local subsidiary of Indian Oil Corporation. Accordingly, the Indian multinational oil and gas company will be allowed to continue its retail operations on the Island nation for another 20 years, with effect from 22 January 2024.

This was communicated by Lanka IOC Managing Director, Dipak Das in a letter addressed to the Chief Regulatory Officer of the Colombo Stock Exchange (CSE). The announcement was made pursuant to Section 8 of the Listing Rules of CSE.