The country’s largest privately held petroleum products distributor Lanka IOC foresees a pickup in the bitumen Sri Lanka market with the restart of several government projects.
“As Sri Lanka accelerates its developmental activities, including the construction and renovation of roads, demand for bitumen is set to increase. Therefore, I am hopeful of resurgence in demand for bitumen within the new financial year,” Lanka IOC Managing Director Subodh Dakwale said.
Though new road construction was halted for just 3 months, Lanka IOC had seen a steep contraction in the bitumen sector during the past financial year.
“With no road development activities by the government during the latter part of the financial year, the demand for Bitumen was severely impacted, causing overall volumes from this segment to contract by 44 percent year-on-year,” Dakwale said.
However, the oversupply of oil in the global market could spell greater profits for the bitumen sector going forward due to reduced cost of production, if retail prices are held up. Crude oil prices fell below US$40 per barrel this week for the first time since 2009.
Bitumen is a hydrocarbon binding material which has a wide variety of industrial applications including its use as a binding agent for road surfacing and waterproofing. It is obtained either naturally, or as a petroleum or coal by-product.
While Lanka IOC imports the bitumen it sells, state-owned Ceylon Petroleum Corporation has the largest bitumen market share through its residual production at the Sapugaksanda refinery.