Aug 14, 2009 (LBO) – Lanka IOC, a unit of Indian Oil Corporation, said it lost 856.7 million rupees in the June 2009 quarter, down from a profit of 1.0 billion rupees a year earlier, as it was squeezed between high taxes and government mandated prices. The import price of diesel and also kerosene is higher than petrol.
Revenues for the quarter increased 4.6 percent to 11.32 billion rupees. Lanka IOC sells diesel and petrol and shares the market with state-run Ceylon Petroleum Corporation.
Lanka IOC managing director Suresh Kumar said a July price hike reduced losses but crude prices are now higher.
Crude prices which plummeted last year are now moving up. Sri Lanka slapped new taxes on fuel. Rising crude prices are now causing losses to petroleum distributors.
The firm has asked for a price hike or a tax cut.
“There should be balance where either taxes or prices change,” Kumar said. “It is not possible to run a business with losses.”
LIOC also had some adverse derivative contracts in the second quarter. Kumar said the firm is losing about 12.00 rupees a litre on diesel and about 12.40 rupees a litre on petrol.
A litre of petrol which is now retailed at 130 rupees is charged about 68 rupees in taxes. Diesel is cha