The Government has decided to expand the Sapugaskanda oil refinery at a cost of Rs. 80 billion.
Ceylon Petroleum Corporation (CPC) Chairman Ashantha de Mel told the Daily News that the move is aimed at cutting down the additional cost spent by the Corporation on importing finished fuel.
The project is scheduled to commence in January 2008.
`We import 50 per cent of the domestic oil requirements as finished products (refined oil) while the rest is supplied by purchasing crude oil and refining them at Sapugaskanda.
Following the expansion, we will be able to refine our total oil requirement locally and thus save a large amount of foreign exchange spent on importing finished products,` he said.
The refining capacity of the Sapugaskanda refinery is 50,000 barrels per day. Once the refinery is expanded, this amount is expected to go up to 100,000 barrels per day, de Mel said.
He said the Corporation will spend its own funds to implement the project.
According to the Petroleum and Petroleum Resources Development Ministry, Sri Lanka spends around US $ 50 million annually on importing refined oil to meet the rising demand.
Meanwhile, Petroleum Minister A.H.M. Fowzie, now on a visit to Libya, has held talks with the Secretary of the Administrative Committee of the Libyan National Oil Corporation on the prospect of cooperation between the two countries in oil and gas fields.
Minister Fowzie has expressed his country`s desire to be supplied by a number of oil derivatives produced by Libyan Oil Sector.
The Secretary of the Administrative Committee of the National Oil Corporation has affirmed the readiness of the Libyan corporation to fulfil the oil derivatives needs of Sri Lanka.