Here’s Hoping

Reports that the treasury has set off tax liabilities of the Ceylon Petroleum Corporation against the full subsidy due from the government, has raised expectations that Lanka IOC would also get the full subsidy owed to it.

The treasury has agreed to set off Rs. 25 billion in taxes due to the government, a top CPC official said.

Around Rs. 21 billion was for subsidies due from the treasury for selling fuel at controlled prices, and Rs. 4 billion was set off against overdue payments due to Ceypetco from the Ceylon Electricity Board.

The audited accounts of the CPC are due to be published at the end of this month.

CPC officials say they expect a profit of around Rs. 8 billion for 2005, after the subsidy issue is sorted out.

Last year CPC made Rs3.9 billon.

Lanka IOC, the Colombo listed subsidiary of the Indian Oil Corporation which is claiming Rs. 7.4 billion as subsidies, has seen its profits dip due to the extra borrowings taken on to finance unpaid subsidies.

Company officials admitted last week that its published accounts would have to be changed if the Sri Lanka government refused to pay the full amount.

But analysts say, with CPC – which is owned by the Sri Lanka