Australia-based energy firm United Petroleum is set to exit the Sri Lankan market and is preparing to sign a termination agreement with the Sri Lankan government, according to a senior official from the Ministry of Energy.
The official confirmed that the Cabinet has already approved the agreement, and the termination process is now in its final stages. As of January 1, 2024, the operations of 64 fuel stations previously managed by United Petroleum were handed over to the Ceylon Petroleum Corporation (CPC) as a temporary measure. This transition followed the company’s decision to cease operations in Sri Lanka, citing difficulties in importing fuel.
The Ministry of Energy has completed all necessary procedural requirements, and the final signing of the termination agreement is expected within the next month. The remaining focus is on technical matters, including the settlement of fuel stock, deposits, and outstanding payments.
Importantly, United Petroleum is not seeking compensation or pursuing any legal action as part of its exit strategy. Instead, the company intends to recover its deposits and license fees as per the terms of its agreement with the government.
United Petroleum had entered the Sri Lankan market in August 2023 under a government initiative to invite international fuel retailers to operate in the country. The company invested $27.5 million to acquire 150 existing filling stations and to develop 50 new outlets.
However, despite this significant investment, the company has chosen to withdraw from Sri Lanka due to concerns over profitability. Its decision coincides with the entry of other international players—Sinopec and RM Parks Inc. (in partnership with Shell)—into the Sri Lankan fuel retail sector.
