pricing formula on the cards
The government is expected to draw up a pricing formula for petroleum
products with a maximum selling price once the third player for
the market is selected, according to M. Nageswaran, managing director
of the Indian Oil Corporation's local subsidiary, Lanka IOC.
third player comes in the pricing formula will be fixed by the government,"
he said. "There'll be a maximum selling price and we can't
go beyond that. Competitive prices will be fixed at that time."
No one will be allowed to sell below cost as that would amount to
dumping, Nageswaran said. "There'll be healthy competition
and the regulatory authority to be appointed by the government will
supervise the competition," he said.
price will be provided which will be linked to international prices
and we hope this will make consumers very happy," Nageswaran
said. "Even industrial players will be happy." Prices
will vary from city to city because of the transport cost involved.
Prices will fluctuate according to crude oil prices.
added that LOIC would source petroleum products from the best resources
and not necessarily from Indian refineries. "We will get it
from the most economical source," he said. "India is not
necessarily the cheapest. Indian products tend to be cheaper because
of the freight advantage.
But if someone
has excess stock to be got rid of, we'll go for it if it is cheaper."
Nagesrawan also said LIOC intends to get into bunkering . "It
will be economical and advantageous to start bunkering in Trincomalee.
When we're able to offer competitive prices.
The cost advantage
will be good that the deviation involved will not be a problem."
Asked about talks on the valuation for the 100 fuel retail outlets
taken over by LIOC, Nageswaran said: "Our figure is very close
to the government's. Our valuation meets the government's expectations."