Sri Lanka puts BPCL deal on hold

Sri Lanka on Monday put off indefinitely a decision to sell off part of the state-run oil company to Bharat Petroleum as trade unions threatened to stop work, triggering panic buying at petrol stations across the country.

The government said a cabinet meeting scheduled to be held on Monday on the restructuring of both the state oil company and the electricity utility was put off and did not give a fresh date.

However, Ceylon Petroleum Corporation chief Jaliya Medagama said the cabinet would take up the question in two weeks.

Long queues formed outside petrol stations across the country after local media reported that the Marxist coalition partner in the government may take "drastic action" if the government went ahead with privatisation plans.

The government, which sold a third of the Ceylon Petroleum Corporation to Indian Oil Company in 2003 is to sell another one third to Bharat Petroleum. The JVP opposes the deal.