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July 27, 2006 (LBO) – Sri Lanka’s cabinet has transferred a third of petroleum assets held by the treasury to the state-run Ceylon Petroleum Corp, with immediate effect, government spokesman Anura Yapa said Thursday. Under the cabinet decision, around 3,500 CPSTL staff will rejoin the CPC workforce. The assets -- which comprises 107 fuel sheds and a 1/3 stake in Ceylon Petroleum Storage Terminals Ltd (CPSTL) -- were held by a firm called Modern Petroleum Marketers Ltd, with ownership vested with the treasury.

CPSTL is a joint venture between Ceypetco (now 75 percent stakeholder) and Indian Oil Corp local unit Lanka IOC (25 percent)

CPC trade unions at CPSTL struck work for two days earlier this week, which dried up fuel supplies to filling stations islandwide.

Unions are demanding CPSTL new chairman, Asantha de Mel's resignation, as they see his appointment as the first step towards the total privatisation of the petroleum industry.

"There is no need now for CPC trade unions to agitate and hold the country to ransom," Yapa, who is also the Media Minister, told reporters.

"CPSTL is a fully-owned subsidiary of the Sri Lankan government, and like any other state corporation, the president has t