By Susitha Fernando Colombo, May 22 : Sri Lanka inked a deal with China's Sinopec to secure fuel supply, a business that was jointly operated by the state-run Ceylon Petroleum Corporation (CPC) and India's Lanka Indian Oil Company (LIOC). According to the agreement, Sinopec will involve in importing, storing, distributing, and selling petroleum products in predetermined distribution dealer operated networks in Sri Lanka. Battered by dollar crunch, one of the key requirements for the new retail supplier was to secure forex requirements without depending on Sri Lanka's banking sector. "It was mandated that these companies source their own funds for fuel procurement through foreign sources, at least during the initial one-year period of operation," President's Media Division (PMD) stated in a statement. "In response to the ongoing foreign exchange crisis in Sri Lanka, the Ministry of Power and Energy has taken this decisive action to ensure an uninterrupted fuel supply to consumers. With the inability to provide sufficient foreign exchange for fuel shipments, the CPC and LIOC faced significant challenges," the PMD added. "In a significant move to address Sri Lanka's fuel supply challenges, a contract agreement was signed with Sinopec, a leading international petroleum company. The agreement, signed, marks a crucial step in ensuring a steady and uninterrupted fuel supply for the nation," the President's Media added. M/s Sinopec Fuel Oil Lanka (Private) Limited along with its affiliated companies was selected among other two competitors, M/s United Petroleum Pvt Ltd, in Australia and RM Parks in the USA, in collaboration with Shell PLC. Sinopec is set to commence operations in Sri Lanka within 45 days following the issuance of the licence, PMD stated. The deal is also part of government's decision to restructure loss making state-owned enterprises such as the CPC. The move is also an initiative to win the much needed International Monetary Fund (IMF) for a 2.9 billion US dollar extended fund facility. Sinopec, with its address in Hambantota, Sri Lanka's southernmost city where Chinese controlled port is situated, already runs bunkering operation there. Sri Lanka's deal with Sinopec also marks China's entrance to energy sector which only the immediate neighbour India had the outside access. /IANS