June 26, 2008 (LBO) – Indian Oil Corporation’s Sri Lanka unit has decided to drop its diesel retail price to match that of the dominant state-owned refiner after threats by government to take over its outlets.
The fuel retailers sell diesel at a subsidised price and try to cover the losses through profits on petrol sales.
The government said after that after the LIOC diesel price hike consumers flocked to CPC retail outlets resulting in increased losses for the state corporation which is already under a heavy debt burden owing to selling subsidised fuel sales.
Ramakrishnan said LIOC has complied with the government request to bring down the price of its diesel to match that of the CPC and now expects the government to reduce the import tax.
The company has asked the government to remove the import tax on petrol.
“We also wrote to the government requesting it to remove the tax and we’re hopeful they’ll help us out,” he said. Lanka IOC said it will reduce its diesel price by 10 rupees a litre and match the Ceylon Petroleum Corporation price of 110 rupees per litre from midnight Thursday.
“The government advised us to reduce the price of diesel, so we have done that,” Lanka IOC ma