Sri Lanka rejects Indian offer to upgrade refinery
New Delhi   01-May-2012

Sri Lanka has rejected an Indian offer to upgrade a refinery that is built to refine only Iranian oil, a minister said on Sunday.

Petroleum Minister Susil Premjayantha said the offer to upgrade the Sapugaskanda oil refinery had come from the IndianOil but Colombo rejected it.

He said since IndianOil already operates a majority of fuel stations in Sri Lanka and as a result increases the fuel prices at will, handing over the refinery to the same company could hurt the local fuel distribution sector, Xinhua reported.

Premjayantha said Sri Lanka needs to upgrade the facility to refine oil from other countries as Iran oil imports will be reduced due to US sanctions on Iran.

Over 90 percent of Sri Lanka's crude oil requirements come from Iran. "We are being compelled to cut our oil imports from Iran because of the US sanctions so we are considering Oman and other countries.