Failure to revise fuel prices “extremely alarming” - LIOC

By Sunimalee Dias

Lanka IOC is taking its mounting losses into the New Year due to stagnant fuel prices.

Petrol and diesel prices at Rs. 115 and Rs. 75 per litre respectively have continued with no change throughout 2010, LIOC Managing Director Suresh Kumar told Daily FT yesterday. 

With the price of crude oil rising to US$ 91 per barrel on Thursday, it was stated that at these prices, the losses were very high. The company has been making a loss on petrol at Rs. 16 per litre and at Rs. 21 per litre on diesel in the wake of soaring prices in the world market and stagnant price levels in Colombo.

Kumar termed it as an “extremely alarming” situation in which the Government had to necessarily intervene.

This situation has arisen since LIOC was made to retain its prices which remained fixed since 30 December 2009, at Rs. 115 per litre of petrol while diesel prices were constant at Rs. 75 per litre since mid 2009.

Considering this an “extremely serious problem,” LIOC has suggested the Government should go in for a combination of changes in duties and selling prices.

It is believed the Government is likely to take the necessary remedial action in a bid to curb the situation.

Kumar pointed out that while they were planning on waiting for a solution from the Government, supplies should, however, be kept going.

“Unlike earlier times, it is very critical,” he said.

LIOC’s parent company in India, the Indian Oil Company (IOC), has also expressed concern over the Colombo-based company’s lack in making profits and requested that representations be made to the Government of Sri Lanka in this regard.