Lanka Indian Oil Corporation (LIOC) is incurring a loss of Rs 14 to Rs.16 per litre of petrol owing to high taxes and hedging (losses) as well as the increase in the purchasing price of refined petrol at $56 per barrel, an official said.
The loss from hedging in the nine months to December 2008 was Rs.1.77 billion. LIOC Managing Director Suresh Kumar said the company pays per litre Rs 84 on petrol and Rs 24 on diesel as government taxes while VAT was raised to 15% from 12% in January. He said duties on imported refined products affected LIOC more than the Ceylon Petroleum Corporation, which refines a part of its products at Sapugaskanda oil refinery.
He suggested that if a price formula and competitive pricing of fuels is allowed, then the fuel retailers such as LIOC will be in a position to consider a price revision, adding that the government should end state control on fuel prices, taking advantage of the sharp fall in crude oil costs.
Meanwhile LIOC post-tax profit for the nine months to December 2008 fell by 75 % to Rs. 363 million from the previous period owing to high taxes and hedgings as well as the high price of refined oil. He said the other reason was that the company had to reduce the price of petrol to Rs. 100 per litre in accordance with the Supreme Court ruling and this also contributed to the drop in profits. |
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