Lanka IOC, Indian Oil’s subsidiary in Sri Lanka, is strongly advocating a fuel price hike as the company is losing Rs. 13 per litre on petrol and Rs.8 to Rs.9 per litre on diesel sales at present.
But the company is managing at breakeven as they are making some profits from bunkering and lubricant business, K. R. Suresh Kumar, Managing Director Lanka IOC PLC told the Business Times.
He noted that the company has made representations to the government to increase a litre of petrol now retailed at Rs.115 by at least Rs.15 and diesel which is sold at Rs.73, by Rs.10 in order for them to survive and to improve infrastructure as well as to set up new petrol stations in the North and East as well as rural areas in the South, now that there are more vehicles running on roads after the government’s 50% tax reduction on vehicle imports.
He pointed out that the company continued its operations with some profits gained in bunkering and lubricant business although it incurred a loss in petrol and diesel sales during the past four years.
Mr. Suresh Kumar said that they are requesting the government to bring the fuel price to the earlier level of Rs.130 per litre of petrol and Rs. 83 per litre of diesel maintained before the presidential elections as the price of crude in the world market was proving to be volatile with prices ranging between US $76 and US $77 a barrel in recent times. He expressed the belief that Ceylon Petroleum Corporation (CPC) will also increase the price as that company too is running at a huge loss.
He emphasized the need to produce Sri Lanka’s total requirement of refined petroleum products within the country itself, by expanding Sapugaskanda refinery, and thereby saving a massive sum of US$ 300 million or Rs.34.5 billion each year, completely halting the imports of refined fuel.
The Lanka IOC is willing to arrange funding for the project from its parent company as it is beneficial for his company, Ceylon Petroleum Corporation and the whole country, he said.