Sri Lanka’s fuel crisis puts Trincomalee oil tank project back in the spotlight

Sri Lanka’s Foreign Minister Vijitha Herath has identified the redevelopment of the Trincomalee Oil Tank Farm as a long-term solution to the country’s ongoing fuel and energy challenges. The government plans to modernise the Second World War-era storage facility and develop Trincomalee into a regional energy hub through a tripartite partnership with India and the United Arab Emirates. This initiative follows a Memorandum of Understanding signed in April 2025 during the visit of Narendra Modi.

The proposed project includes upgrading existing oil storage tanks, developing new refining and distribution infrastructure, and attracting international investors through a forthcoming tender process. The move comes amid renewed fuel shortages in Sri Lanka caused by global supply disruptions, prompting the government to introduce fuel rationing systems and energy-saving measures. Authorities are expediting technical evaluations to move the project into the implementation phase.

The Trincomalee tank farm, originally built in the 1930s with 99 large-capacity storage tanks, has long been a strategic asset with a complex history of agreements and disputes. After multiple reversals involving the Indian Oil Corporation and the Ceylon Petroleum Corporation, the current government has reaffirmed its commitment to joint development despite earlier political opposition. The project is expected to strengthen Sri Lanka’s energy security while positioning Trincomalee as a key regional energy and logistics hub.

Source:

https://www.tamilguardian.com/content/sri-lankas-fuel-crisis-puts-trincomalee-oil-tank-project-back-spotlight