By Nishel Fernando 

Australia’s United Petroleum, the latest entry into Sri Lanka’s retail fuel market, targets to supply the Sri Lankan market with 350-400 million litres.

United Petroleum Lanka Private Limited (UPL), a wholly-owned subsidiary of Australia’s United Petroleum, last week announced that the company would be gearing into operations from August 28 onwards.

“Our target is 350 million litres per annum that might go up to about 400 million litres per annum. This is only one pie that’s needed to cut into five. What this demands is strategic planning and service par excellence. That is why we refer to our staff not as pumpers but as ‘Service Champions’. We are proud of raising the service level here in Sri Lanka,” UPL Director/CEO Dr. Prabath Samarasinghe told Mirror Business on the sidelines of its inaugural dealer event held in Colombo last week.

Australian High Commissioner to Sri Lanka Paul Stephens speaking at the event highlighted United Petroleum’s foray into Sri Lanka makes a significant milestone in the bilateral relationship of the two countries.

“With over US $ 300 million investment coming to Sri Lanka, this marks a significant milestone. United Petroleum’s presence is expected to enhance competition and implement best practices in the local petroleum industry,” he said.

According to Dr. Samarasinghe, United Petroleum has already made this investment and plans to retain this sum for at least one year in accordance with Sri Lanka’s exchange control regulations.

Further, he highlighted that United Petroleum has an advantage in purchasing fuel from already established suppliers. 

“Our agreement with Korea and Aramco allows us to buy the same fuel we purchase in Australia, which is a significant advantage. We purchase 5.6 billion litres annually in Australia, while for Sri Lanka’s 150 stations, we require only 350 million litres per annum — about 6 percent of our total purchase,” he said.

However, it’s not clear whether UPL would be able to offer a lower retail price than the other four players. 

Speaking at the occasion, Petroleum Shed Owners Association President Kumar Rajapaksa requested UPL to provide fuel at a concessionary rate, similar to Sinopec, in order to meet the targets. Meanwhile, UPL also plans to expand its lubricant range and convenience store concept in the fuel stations across the country.

According to UPL General Manager Retail Operations Gratien Wickramasinghe, the company has already signed agreements with 82 dealers. The government has allowed UPL to commence operations with 150 existing fuel stations initially and with rights to establish 50 new fuel stations.

However, Power and Energy Minister Kanchana Wijesekera noted that this can be increased based on the demand and requirements of the country.

Meanwhile, United Petroleum Chief Operating Officer Grant McGregor shared plans to introduce United Petroleum’s range of lubricants at fuel stations. In Australia, United Petroleum has a 10 percent market share in the retail fuel market and the company generates around AUD 6 billion in revenue per annum, according to McGregor.