August 29, 2006 (LBO) – Indian fuel retailer Lanka IOC Ltd reported a net loss of 584.0 million rupees for the three months to June on Tuesday, citing unpaid subsidy payments of 116.0 million rupees due from the Sri Lankan government. A unit of the Fortune 500 Indian Oil Corp. the Sri Lankan unit ran out of cash to replenish stocks as Colombo failed to settle 7.6 billion rupees in subsidies for selling fuel at government controlled prices.
During April-June total sales rose to 8.93 billion from 8.13 billion recorded in the same period 2005. The firm made a 337 million net profit during the first quarter of 2006.
“We are hoping to swing back into the black when our financial year ends in March next year,” LIOCs Managing Director K Ramakrishnan told LBO.
He said the company plans to raise fuel prices by around 7-percent next month, to recover losses as global oil prices have more than doubled since they bought crude at 32 dollars a barrel in January 2004.
Lanka IOC is losing 7 rupees for every litre of fuel sold as local prices have not kept pace with changes in the global landscape.
From September, prices of gasoline are due to go up from 98 rupees to 105 rupees and diesel from 66 rupees to 71 rupees, he said.