Lanka IOC losing $6mm/month

The Sri Lankan subsidiary of Indian Oil Corporation (IOC) is incurring a loss of nearly $6 million a month due to the steep rise in global crude oil prices, and has sought an increase in petroleum prices.

The losses of Lanka IOC (LIOC), as a result of the crude oil prices hovering around the $100 per barrel mark, are likely to rise further due to the Sri Lankan government's reluctance to raise petroleum prices before the end of this year.

Petroleum Minister A H M Fowzie told reporters on Thursday that a price hike is not likely before the year-end.

Both Fowzie and Asantha de Mel, chairman of Ceylon Petroleum Corporation, are hopeful that oil prices would decline in the coming fortnight.

According to K Ramakrishnan, managing director, Lanka IOC, the company is incurring a loss of Rs 540 million (Sri lankan rupees) a month on diesel imports and Rs 120 million on petrol imports. This works out to $5.97 million.

Ramakrishnan observed that although the trend in the past has been a slide in oil prices in the November to January period, this has been proven wrong given the current situation in the global market.

LIOC, a subsidiary of Indian Oil Corporation, is the only public sector oil firm other than the state-owned Ceylon Petroleum Corporation that operates retail petrol stations in the island country.

It has been incorporated to carry out retail marketing of petroleum products, bulk supply to industrial consumers, building and operating storage facilities at the Trincomalee Tank farm.

(Reporting by T V Sriram)