Dec 19, 2008 (LBO) – Lanka IOC, a unit of Indian Oil Corporation, is cutting the retail price of petrol to 100 rupees a litre on an order by Sri Lanka’s Supreme Court, an official said Friday.
The court order came following a public interest petition which said the government was charging 72 rupees of tax from petrol which cost less than 30 rupees a litre to import.
Lanka IOC, a listed company in the Colombo Stock Exchange is cutting prices ahead of any cut on government levies, hurting its margins.
The court order also directed the Treasury to charge a higher percentage of tax from Lanka IOC which is leaner and has lower operating costs, compared to the more inefficient CPC which has been stuffed with government supporters for decades.
Court also ordered the CPC’s former chairman sacked and its finance manager had been barred from coming to work over controversial derivatives the utility bought to fix prices.
Court has also halted payments to banks on the derivatives. “Our lawyers have advised us to cut the price,” Lanka IOC chief executive Suresh Kumar said.
“We have started informing the outlets from around 8.00 p.m.”
Lanka IOC usually piggy backs on the