Indian Oil Corporation’s petroleum license renewed for 20 years by Sri Lankan government

31 Oct 2023 , 11:02 AM

According to officials, the Sri Lankan government has renewed the petroleum products license granted to Lanka IOC, the local subsidiary of Indian Oil Corporation, for another 20 years.

The initial permit, obtained in 2003, was set to expire in January 2024. Lanka IOC will be able to continue its retail business on the debt-ridden island nation until January 22, 2044.

President Ranil Wickremesinghe handed over the license renewal letter to Dipak Das, the Managing Director of LIOC, late last week, according to Aseem Bhargav, the Chief Financial Officer of LIOC.

In Sri Lanka, the LIOC controls around 20% of the motor gasoline market.

When Sri Lanka fell into an economic crisis and ran out of foreign currency to import petroleum products, the LIOC operation became critical in the energy sector. It has nearly 200 retail shops spread around the island.

Sinopec of China entered the retail gasoline trade as the third participant in August, while RM Parks of the United States and United Petroleum of Australia are also set to begin operations soon.

Rahman said that the initial deal with Lanka IOC was signed in 2001, offering the business substantial tax breaks and a 20-year license to operate in Sri Lanka in exchange for a USD 70 million investment.

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