More than 650 employees at the Sapugaskanda Refinery, the country’s sole oil refinery, face potential job losses due to its transformation into a separate public enterprise.

According to sources, the government plans to retain only approximately 200 of the current employees for the new enterprise. 

The remaining workers will be placed in a pool from which the new enterprise will select the necessary personnel to maintain operations.

In March, the Cabinet of Ministers recently approved a proposal to operate the Sapugaskanda Oil Refinery as a state-owned business entity disjoined from the Ceylon Petroleum Corporation (CPC). 

The government had said it has identified the need to make a ‘critical investment’ to upgrade the oil refinery in order to keep it up and running for another 25 years.

Thereby, it has been decided that the Sapugaskanda Oil Refinery be operated as a separate public enterprise and to call Expressions of Interest (EOIs) to select a suitable strategic investment partner to upgrade the infrastructure facilities to address the existing operational challenges.

The Power and Energy Minister had said the government is also exploring the option of relocating the Sapugaskanda Oil Refinery to Trincomalee in the future with upgraded modern facilities and the development of the Tank Farm.

The facility, which is the only oil refinery in Sri Lanka, was established in 1969 and fulfils approximately 25% of the country’s demand for refined petroleum products.