Lanka IOC (LIOC) - the Indian oil subsidiary in Sri Lanka is awaiting government approval to increase the price of petrol.
Speaking to the Sunday Times FT, LIOC Managing Director K.R. Suresh Kumar said the company was now running at a loss due to rising oil prices in the world market. He said discussions were held with Minister A.H.M. Fowzie and Senior Ministry officials recently on the possible fuel price increase or the reduction of taxes imposed on oil imports.
Mr. Kumar added that according to their agreement, the company could revise prices at any time. However, he noted that LIOC did not want to revise the price without the government’s endorsement, while he was taking decisions in consultation with government authorities.
He said that LIOC had incurred a loss of Rs.130 million in April and Rs. 500 million this year by selling fuel at current prices because the world crude oil price had risen from US $ 37 to around US $70 during the past few months .
The company is losing Rs 29 per litre of diesel and Rs.23 per litre of petrol. “We have imported a large quantity of petrol - 26,000 metric tons and it will be over very soon.
The company has no money to import the next parcel of fuel,” he said. “Under these circumstances we have no alternative than to increase fuel prices,” he added. Mr. Kumar said that LIOC plans to expand its fuel filling station network countrywide and in the East as well in order to sell more fuel in Sri Lanka, since the company could harness the best from its surplus refining capacity in India. India has a refining capacity of 149 million tonnes per annum of crude oil, and IOC, the country’s largest refiner, has a 40.4% share of the business. It controls 10 of India’s 19 refineries.
LIOC currently retails petroleum products and also supplies them in bulk to industrial consumers out of a storage facility in Trincomalee. |
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