Sri Lanka’s IOC a visible player among Sri Lanka Oil Companies, a subsidiary of Indian Oil Corporation, is to expand their existing bunkering operations at Trinco port as the prospects for this business line are promising, particularly given the strategic positioning of the port and its significant potential for growth, the company said.
Trincomalee is the world’s 5th best natural harbour and provides an excellent opportunity to meet the bunker need of the vessels operating on the Bay of Bengal – Western Countries shipping route.
LIOC commenced bunkering operations in Trincomalee in June last year and to optimize the storage and operating costs the company commissioned storage of bunker fuels at its Trincomalee Terminal in February 2016.
The company currently operates one bunker barge with capacity for 400 MT of 380cst fuel and 400 MT of MGO.
The forex income generated from this business line has enabled the LIOC to hedge against its foreign currency payments in the purchase of oil imports.
During the 2015/16 financial year, bunkering has achieved a volume growth of 20 percent although revenue declined by 31 percent due to the reduction in international prices, the company’s annual report showed.
Operating from Colombo and Trincomalee harbour, LIOC is the 2nd largest operator for bunkering in the island’s bunkering market supplying fuel oil and diesel for vessels at berth and anchorage at the Colombo and Trincomalee ports, which accounted for 13 percent of company’s revenue.
During the Indian PM’s visit to Sri Lanka, Ceylon Petroleum Corporation and LIOC agreed to jointly develop the upper tank farm of the China Bay installation in Trinco.
Lanka IOC, already operates 15 oil storage tanks out of 99 tank farm in Trinco and each storage tank has a capacity of around 12,000 tonnes.
Meanwhile, petroleum sector unions recently charged the government for trying what they called ‘to privatize’ the Trincomalee tank farm to India and Hambanthota oil and bunkering business to China.
Convener for Petroleum Union Collective D J Rajakaruna said the government allows other countries to make profits out of promising bunkering business in Trinco and Hambanthota without letting the business to the state owned CPC.
He further charged that the government is also planning to form a separate company under CPC for aviation business with a view to ‘privatize’.
Taken from – LBO