Ceylon Chamber welcomes moves to liberalise petroleum sector

• Calls on Govt. to reconciliation and economic reforms with equal vigour as they are fundamental anchors for the future direction of Sri Lanka
• Says EOI responses towards new Hambantota Refinery must be transparent

Chairman Vish Govindasamy

The Ceylon Chamber of Commerce on Wedn-esday welcomed the moves to liberalise the petroleum sector but stressed the Government should also pursue reconciliation and economic reforms with equal vigour.

Issuing a statement, the Chamber said it notes with satisfaction the steps taken to implement crucial economic reforms. It is important to maintain the reform momentum under the IMF program, in order to meet the program requirements, as well as implement structural reforms that will ensure sustainable revival. 

The Chamber appreciates the steps taken by policymakers in the Power and Energy sector. It is encouraging to note that competition is being introduced to the petroleum sector which was previously dominated by the State. 

“Opening the retail distribution business to three additional players will allow for competition, an increase in quality of service, and for outlets to be set up in remote areas of the country. New players being able to import and supply fuel to the country will also reduce the over-reliance on the CPC to procure dollars and distribute fuel, thereby reducing the vulnerabilities faced in 2022 due to a shortage of dollars in the banking system,” the Chamber said. 

It also said that the recent media reports regarding the EOI responses towards the Hambantota Refinery should be analysed with caution. 

“Any process which lacks governance and transparency could lead to corruption which is an issue that has hindered the progress of economic development and attracting genuine foreign direct investments. Given the complexities inherent in reforms and changing processes, we advise the Government to set in place transparent processes and governance structures that will facilitate the divestiture of non-strategic commercial assets/stakes, as well as encourage investment in strategic assets such as the Hambantota oil refinery,” the Ceylon Chamber said. 

“This would also complement the IMF’s engagement with the Government which is aimed at improving the governance framework through a diagnostic analysis, which is a structural benchmark under the Extended Fund Facility with the IMF,” it added. 

The Ceylon Chamber also hailed the statement made by the President at the recent ‘Economic Dialogue – IMF and Beyond’ Forum organised by CA Sri Lanka, which refers to the two E’s in the country – the ethnic issue and the economic issue – and the importance of addressing both these issues in order to achieve real progress.  

“The Chamber recognises these as fundamental anchors for the future direction of the country. The recognition of the nexus between reconciliation and ethnic harmony, and economic reform, is vital. The Chamber supports this initiative and will strive to initiate programs at a business level that will complement this agenda,” the statement said. 

In its statement, the Ceylon Chamber of Commerce said it stands ready to assist the Government in driving a progressive reform agenda and recognises that the private sector is an equal partner in ensuring an accelerated economic recovery.