- Allegations of Indian financing for local expansion
- Dealers seek reinstatement with CPC
- RM Parks denies allegations, asserts operational control
The Power and Energy Ministry has formally requested RM Parks, a US-based company entering the nation’s fuel market, to disclose the specifics of its financial sources.
The Sunday Morning reliably learns that the letter, written by Power and Energy Ministry Secretary Dr. Sulakshana Jayawardena, was dispatched to RM Parks’ Sri Lankan office last week. The ministry anticipates a response from RM Parks this week, it is learnt.
Against this backdrop, questions have surrounded the funding of RM Parks’ venture into Sri Lanka’s fuel market, as an anonymous source has alleged that despite its American roots, RM Parks’ financial lifeline had been traced back to an undisclosed Indian investor, shrouding the venture in mystery.
Sources alleged that RM Parks’ investment into Sri Lanka had been marred by financial turmoil, resulting in delays in supplying fuel to its stations and disrupting operations for local dealers.
The sources further indicated that these difficulties had prompted some dealers to seek reinstatement as Ceylon Petroleum Corporation (CPC) dealers.
When contacted by The Sunday Morning for clarification regarding the allegations against RM Parks’ financial investments, Dr. Jayawardena said: “I don’t have an exact idea where they got the investment from.”
However, addressing the alleged difficulties faced by the dealers, the Secretary acknowledged the requests made by several dealers, who had signed agreements with RM Parks, to allow them to continue business with the CPC, citing several issues the ministry was yet to resolve.
Accordingly, the Secretary has sought clarifications from RM Parks’ Sri Lankan operations to divulge the details of their financial sources.
“We review their progress. I sent letters to inform the ministry on how they finance their operations. By next week, I will be in a position to say where the finances came from,” Dr. Jayawardena noted.
Meanwhile, The Sunday Morning has learnt that unlike the two other international companies already entrenched in the petroleum business – LIOC and Sinopec – RM Parks has not offered attractive packages for its dealers. Instead, it is maintaining a business model akin to the CPC’s.
As learnt by The Sunday Morning, both Sinopec and LIOC are extending Cash on Delivery (COD) facilities to their dealers but, as of last Thursday (6), RM Parks had not provided such a facility to its dealers.
Last year, RM Parks Inc., a fuel distribution company based in California, US, signed an agreement with the Board of Investment (BOI), entailing an investment of $ 100 million. Per the terms, the company committed to serving Sri Lanka’s petroleum sector in collaboration with Shell PLC.
As announced by the BOI last year, Shell is a global energy and petrochemical company, headquartered in London, the UK. It explores, extracts, and markets oil and gas, produces gas-to-liquid fuels, trades energy resources, refines crude oil, and generates electricity from renewable sources.
RM Parks Inc., a California-based fuel distributor with over 50 years of experience, operates franchise fuel stations and imports, stores, and distributes petroleum products in Sri Lanka.
Shell, on its official website in March announced its plans for Sri Lanka. It stated that the Shell brand would make its debut in the Sri Lankan fuel retailing market through a partnership between Shell Brands International AG and RM Parks Ltd.
This collaboration involves a retail brand licence agreement and a product supply agreement between the two parties.
According to Shell, RM Parks is a partnership between the Tristar Group and RM Parks Inc., both well-established entities in the energy industry.
“Together, they will rebrand an existing network of 150 retail fuel stations across Sri Lanka, whose contract to operate was awarded by the Sri Lankan Ministry of Petroleum and Energy in 2023, initially for a 20-year period. Through this partnership, Sri Lankan consumers will gain access to Shell’s renowned portfolio of fuels and lubricants, along with offerings in lower-emission fuels and convenience retail, leveraging Shell’s expertise as a global leader in mobility and quality services for motorists worldwide,” Shell has stated.
RM Parks commenced its operations in Sri Lanka three weeks ago with a network of nearly 100 dealers countrywide.
In response to the significant fuel shortages in 2022 which caused the country to come to a standstill for several months, Sri Lanka initiated the opening of its energy market to private international companies. In September 2023, China’s Sinopec became the inaugural player to enter the market.
Amidst this backdrop, when contacted by The Sunday Morning, RM Parks Sri Lanka Managing Director Susantha Silva dismissed all claims as baseless, asserting that their operations were currently under complete control.
“We are setting up this new company and there can be initial hiccups as people take time to adjust. We are now in the third week of distribution and there are no issues at all as of yet,” he stated.
Acknowledging the letter sent by the Secretary, Silva said that his company would respond to it this week. Elaborating further, Silva emphasised that there were no issues with his staff and disclosed that they had only one adviser of Indian origin currently working for the company.
“We have not received any queries from the dealers who have signed agreements with us,” he stated. Additionally, he suggested that some individuals were attempting to sabotage the operations, attributing the spread of false information to their efforts.