There had been unconfirmed reports in the local media that the government was eying the 99-tank storage facility in the north-eastern port district of Trincomalee, but information minister Keheliya Rambukwella on Thursday announced at the weekly cabinet press briefing the plans to take back unutilised tanks from Indian Oil Company's local arm known as Lanka IOC.
Rambukwella said there were provisions to re-possess tanks that were not used by the IOC's local unit, Lanka IOC, which bought one third of the government's retail oil business in 2003.
In line with the privatisation, Sri Lanka gave the World War II tank farm of 99 storage tanks in the north-eastern port of Trincomalee to Lanka OIC, which is using 15 of them and refurbishing two more.
The minister said the new petroleum minister Anura Yapa after assuming duties in January was keen to expand the state-run Ceylon Petroleum Corporation (CPC) business and wanted to increase the CPC's storage capacity.
"If they are not using these tanks, the CPC wants to take them back and put them into good use," Rambukwella told reporters here.
"If Lanka IOC is not using them and they have no future use for them, the CPC wants them. After all, this is for our country," he said.
The decision was announced as India voted with the US at the UN Human Rights Council in Geneva criticising Sri Lanka's rights record, but Rambukwella said the decision to partially take back the tank farm had nothing to do with the UNHRC vote.
Lanka IOC head Subodh Dakwale said they were unaware of the government decision. He said they were refurbishing two more storage tanks at a cost of 17 million dollars.
"Sri Lankan government has been negotiating with us for some time. I would say its been a few months. We have'nt heard anything from the government," Dakwale said.
India, however, denied the reports. External affairs ministry spokesperson Syed Akbaruddin said they have checked the facts with the senior officials in Colombo and it was told that nothing of that sort took place.