Sri Lanka, under Ranil Wickremesinghe, is banking on oil diplomacy to gain proximity to India before Colombo holds peace talks with the LTTE.As a major concession, Indian Oil Corporation (IOC) will be given 100 of Ceylon Petroleum Corporation’s (CPC) retail outlets to market auto fuels in hitherto closed Lankan market. For the first three years, IOC and CPC will the only marketing firms, allowing a third member thereafter.Sources said Wickremesinghe’s Cabinet has approved the proposal ‘‘in principle’’ and an agreement between the two sides will be signed on Tuesday, during the Lankan Prime Minister’s visit to Delhi.The pact will also include handing over strategic Trincomalee Tankages on the Lankan east coast to IOC for receipt, storage and distribution of petro products. The IOC will pay a nominal rental with a right to provide bunkering services at China Bay.The tanks, built during World War II, have long been sought by oil traders as these are the only tankages between Singapore and the Middle East. Each of the 99 tanks have a storage capacity of 10,000 kilolitres.The agreement also permits IOC to export 30,000 tonnes of diesel and 10,000 tonnes of aviation turbine fuel to Lanka every month. The two sides will also discuss the modalities of sharing Lanka’s ATF business. The proposal is to set up a joint venture of the two state-run firms. Sources said the pact assumes significance since the Lankan government and the LTTE are scheduled for peace talks soon.
