December 13 2019
Lanka IOC raises prices following losses
27 March 2018

Cites rise in international prices, lack of pricing formula from Lankan govt.

Lanka IOC, a subsidiary of Indian Oil Corporation, has increased retail prices for petrol and diesel after about five years, to cope with heavy losses.

Losses incurred since 2015, coupled with the Sri Lankan government’s apparent reluctance to come up with a revised pricing formula — which corresponds to international prices — have compelled Lanka IOC to raise the price of petrol by nine rupees, to LKR 126 per litre and the retail price of diesel by five rupees, to LKR 100 per litre during the weekend, the company said.

Speaking to The Hindu on Monday, Lanka IOC’s managing director Shyam Bohra said that amid soaring crude oil prices internationally, Lanka IOC incurred a loss of LKR 14 per litre on petrol and LKR 19 per litre on diesel.

Observing that the volume (of sales) had started dropping since the price revision on Saturday, Mr. Bohra said: “We will know the impact in about five to seven days.”

Lanka IOC — which controls a third of the island’s market, operating 189 fuel stations across the nation — has incurred losses over the last four consecutive quarters, with a cumulative loss of about LKR 1.3 billion. The state-owned Ceylon Petroleum Corporation (CPC) controls the rest of retail segment.

‘Pressure to raise prices’

Following pressure from different quarters including the International Monetary Fund (IMF) to boost revenue, the government increased the excise duty on diesel in recent years, but there has not been a corresponding increase in retail prices, putting oil firms under considerable pressure.

The CPC is yet to indicate its position on a possible increase in fuel prices.



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