Colombo: India is fast-tracking a multi-product oil pipeline to Sri Lanka as it seeks to deepen energy ties with the island nation and counter China’s growing footprint in the region’s fuel market.
Indian officials called for “swift implementation” of the proposed regional energy hub in Trincomalee during bilateral talks here on Sunday, with Foreign Secretary Vikram Misri telling reporters, “There is no further time to lose in making progress on strategic projects such as these.”
The planned hub, involving India, Sri Lanka and the UAE, includes a fuel pipeline linking southern India to Trincomalee and Colombo, and an under sea power grid connection.
President Ranil Wickremesinghe said, “Constructing a multi-product petroleum pipeline from the southern part of India to Sri Lanka will ensure an affordable and reliable supply of energy to Sri Lanka”.
The push comes as China’s Sinopec expands in Sri Lanka, challenging Indian Oil Corp’s long-standing presence. Sinopec began fuel retailing with 150 petrol stations in September 2023 and is conducting a feasibility study for a $4.5 billion refinery at Hambantota. Lanka IOC, which entered Sri Lanka in 2003 and holds 16% of petrol and diesel sales, is adding 30 new outlets to defend market share.
“Their dependency on China is not there in energy supplies,” an Indian official said. “That is a sector where we have a significant stake. That will increase with the pipeline”.
Sri Lanka, which imports all its oil and raised fuel prices after the Middle East war disrupted supplies, is balancing both neighbours. A 2022 joint venture with Lanka IOC revived the World War II-era Trinco oil tank farm, giving India a 49% stake and a 50-year lease on 14 tanks. New Delhi has also proposed a $1.2 billion subsea power line.
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