Amendments to Petroleum Acts get final touches | Sunday Observer

Amendments to Petroleum Acts get final touches

The final touches to the much anticipated amendments to the Ceylon Petroleum Corporation (CPC) Act and the Petroleum Products (Special Provision) Act are currently being drafted, prior to the amendment process taking its course, a top official of the Ministry of Petroleum Resources Development said.

A key amendment under the Petroleum Products (Special Provision) Act is to transfer regulatory powers to the Public Utilities Commission of Sri Lanka (PUCSL) which currently acts as a shadow regulator for the lubricant industry. Water and electricity are fully regulated by the PUCSL. Ministry of Petroleum Resources Development Secretary Upali Marasinghe said the amendments to the Acts are currently at the draft stage and once the drafting has been completed it will take its natural course as in the amendment process of any Act.

However, energy sector experts said the amendments to the Acts have been in the backburner far too long and as a result issues such as the tug of war between the Ceylon Petroleum Corporation Engineers’ Union and the PUCSL over the long term power expansion plan could have been nipped in the bud and the country would have benefited with power generation plans being up and running by now. According to a PUCSL official there had not been a single power generation plan implemented since 2015 and as a result the demand and supply gap has widened paving the way for a power crisis to loom on the horizon.

“We rule out completely an imminent power crisis if the proposed power gereration plans are not being implemented,” he said.

Energy experts said the country is left to face the brunt of all the wrangling and dilly dallying over the years between the powers that be that has caused colossal losses to the economy that has the potential to reach a much higher growth rate from what it is today.

However the transfer of regulatory powers to the PUCSL is still under discussion and its approval will be on the concurrence of the Petroleum Resources Development Minister and the Cabinet.

“We work closely with the PUCSL in obtaining its technical expertise and opinion at the screening stage of granting license to new players to the lubricant market,” Marasinghe said.

On the number of players for the lubricant market he said if a company could meet the criteria it could obtain license to be a player in the lubricant market.

“We are currently making amendments to the criteria to grant licenses to enter the lubricant market which hopefully will be finalized by early October this year, Marasinghe said.

The aim of enacting the Petroleum Products (Special Provision) Act is also to liberalise the retail, lubricant and bunkering businesses of the petroleum sector. Currently the lubricant market of the country comprises 13 players.

The decision to liberalise the lubricant market was first taken in 2006 and further extended in 2016.

Modernisation of the refineries which has been long overdue is taking place according to the ministry secretary who said there is limitation to upgrading the refinery which is quite old. However, according to Marasinghe measures have been taken to reduce the naphtha rate to increase the petroleum yield. Naphtha is a byproduct of the refinery process which results in a reduction in the main product.

However, according to industry experts its time that there should be a new refinery for petroleum in the country. The CPC was set up as a State enterprise in 1961.