Is IOC’s last letter an ultimatum over fuel prices?


By Ifham Nizam

The Indian Oil Company (IOC) Sri Lanka which claims to have lost nearly Rs. 700 million during the past few months of this year has welcomed the government initiative to introduce a price formula.

IOC Sri Lanka Managing Director, Subodh Dakwale told The Island that they had written to the Finance Minister staking out their position.

He said the IOC had been writing to the governent on fuel prices for some time. He said he hoped its last letter would yield the desired results. The IOC MD said they were losing between

Rs. 22.00 and Rs. 23.00 on a petrol litre alone.  

Dakwale said that when the last price revision was made world crude oil price was at USD 45 per barrel and now it was USD 65. In other words, a near 50 per cent jump.

Fuel prices would not be increased despite requests from some quarters, however, the government would go into the pricing formula on fuel prices soon, Finance Minister Ravi Karunanaya said.

Karunanayke assured that they would come out with a detailed report on the pricing methodology and how the government had been able to give a massive concession on fuel.  

He reiterated that permission would not be granted to increase fuel prices. "As a people centric government, the current administration will always look at all issues from the people’s point of view," he said.

According to Power and Energy Ministry Secretary, Dr Suren Batagoda, the Ministry of Power and Energy is having discussions with the Treasury to formulate a solution which he believed would provide relief to the Ceylon Petroleum Corporation (CPC) and Lanka IOC.

According to a senior CPC official their current losses stand at Rs. 4 billion.

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