In a bid to overcome the LP gas crisis, the Government has decided to establish a new firm affiliated to the State-run Ceylon Petroleum Cooperation (CPC).

A proposal to this effect submitted by the Energy Minister Udaya Gammanpila has been approved by the Cabinet of Ministers this week.

In May, the Cabinet decided to call for international bids for a 100,000 barrels per day (bpd) oil refinery on a Build-Operate-Transfer (BOT) basis and to amend the Ceylon Petroleum Corporation Act No. 28 of 1961, to end the State refining monopoly.

At present, the CPC has a capacity to produce only 5% of the gas requirement and the rest is supplied equally between two companies – Litro Gas Ltd. and LAUGFS Gas Plc.

“The Government has begun the construction work of a new oil refinery in Sapugaskanda. The establishment of the new facility will be able to cater 20% of the LP gas requirement in the country,” the Energy Ministry said in a statement.

The existing 38,000 bpd refinery by CPC will be expanded to 45,000 bpd through the proposed refinery project. The feasibility study in this regard is supposed to be completed by October 2021.

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