United Petroleum Exit Raises Fears Over Sri Lanka Fuel Reform
- CNL Reporter
- August 31, 2025
- News
- United Petroleum
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Sri Lanka’s push to liberalise its petroleum sector has been dealt a major setback with the sudden withdrawal of Australian energy giant United Petroleum, barely a year after its high-profile entry.
Ceylon Petroleum Corporation (CPC) Managing Director Dr. Mayura Neththikumarage confirmed the exit, noting that the firm cited dissatisfaction with operational conditions and the limited scale of Sri Lanka’s market. The company halted fuel supplies in December 2024, and its 64 stations have since reverted to CPC management.
United Petroleum’s departure is particularly significant as Sri Lanka was its first overseas retail venture. The firm had entered in August 2024 with a 20-year BOI licence and pledged $27.5 million to import, store, and distribute petroleum products. Its launch was hailed as a landmark step toward diversifying the market and reducing reliance on CPC’s dominance.
The withdrawal now raises concerns about whether Sri Lanka can sustain international investor confidence. Industry sources suggest that regulatory bottlenecks, opaque pricing policies, and political uncertainty may have influenced the decision, beyond the issue of market size.
With only Chinese, US, and Indian firms now active, analysts warn that other players could also reconsider their presence unless systemic challenges are resolved. For consumers, fewer competitors could mean reduced efficiency gains and weaker service improvements.
The development threatens to undermine not just fuel market reforms but also Sri Lanka’s broader credibility as a reliable investment destination.
