Lanka IOC seeks new Govt’s assistance to earn more dollars for the country
Lanka IOC, the subsidiary of Indian state-owned Indian Oil Corp, is seeking a bond facility or tax concession from the new government for the sustenance of its bunkering business at Trincomalee oil terminal which started two months ago, a top official of the company told the Business Times.
“The transport cost of bunker oil from Colombo to Trincomalee is very high and the company cannot service ships passing Trincomalee harbour charging a competitive rate. It is losing business due to low prices offered by Indian bunkering operators,” Lanka Indian Oil Corp. Managing Director Subodh Dakwale revealed.
Lanka IOC’s bunkering operations are currently facing severe price competition from Indian ports that are able to offer lower prices due to domestic production of fuels while Lanka IOC has to accommodate the additional costs related to fuel imports, he pointed out.
He noted that his company will make a request in writing from the new Finance Minister Ravi Karunanayake soon to provide some tax concessions for them to penetrate the bunkering market of Bay of Bengal to earn much needed foreign exchange for the island nation
The company’s bunkering operations will provide an additional fuel option to vessels operating in the Bay of Bengal.
Lanka IOC is targeting to sell 10,000 to 12,000 Metric Tonnes( MT) of fuel oil and marine gasoil by the end of this year, he disclosed.
“Lanka IOC has positioned one bunker barge at Trincomalee for delivering marine fuel bunkers to the ships at berth and anchorage,” he said.
“With more than 30 meters draft available, the Trincomalee Canyon provides natural shelter making this port a better place for bunkering at anchorage even during adverse weather,” Mr. Dakwale added. Storage tanks in Trincomalee have the capacity of storing 26,000 MT of oil at a time.
This facility will also be beneficial for the ships operating on East Coast of India, West service as Trincomalee port is situated on this shipping route and ships need not detour from their route for taking bunkers resulting in considerable saving of bunker fuel consumption and time of the vessels, he pointed out.
It has also deployed a bunker barge at Trincomalee for delivering marine fuel bunkers to the ships at berth and anchorage.
In addition the company will expand its lubricant oil ‘SERVO’ market in overseas by entering into Malaysian and Indonesian markets soon, he revealed.
SERVO Brand oil is being manufactured at the lubricant blending plant with a capacity of 18,000 tonnes per annum and state-of-the-art fuels and lubricants testing laboratory at Trincomalee, he said adding that export markets will open up new revenue opportunities over the longer term.
Mr. Dakwale said that Lanka IOC is planning on investing Rs. 400 million to add another 20 fuel stations to the current network of 150 stations, while also completing refurbishments of the existing fuel outlets.