Sapugaskanda refinery expansion stalled despite land acquisition

2026-03-29 - 06:54

Although Rs. 1,684.53 million has been spent on conducting a feasibility study and acquiring land to expand the Sapugaskanda refinery and construct a second refinery to improve energy security, the project has not yet been implemented, reports indicate. A sum of Rs. 171.39 million was spent in 2021 to carry out the feasibility study. The audit also found that no physical progress has been made on modernising or expanding the refinery. It is further stated that the land acquired for the project remains idle and unused, and that the Ceylon Petroleum Corporation has not utilised it for any economically productive purpose. Sri Lanka spends approximately USD 4,233 million annually on the import of crude oil and refined petroleum products, which accounts for 25.2 per cent of the country’s total import expenditure. Of this, USD 3,095.50 million is spent on importing refined petroleum products. In meeting fuel demand, the Sapugaskanda refinery supplies around 25 per cent, while the remaining 75 per cent is met through imports. In this regard, the Ministry of Energy states that, following the current government coming to power, expressions of interest have been called from international companies to construct a new refinery with a daily refining capacity of 10,000 barrels. Around 20 such proposals have been received, and the Ministry further notes that evaluations of the submitted documents are currently underway.