Petrol 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.

"Once the 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.

"Competitive 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.

Nageswaran 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."

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