Rising Oil

June 18, 2009 (LBO) – Lanka IOC, a unit of the Indian Oil Corporation had asked Sri Lanka’s petroleum ministry permission to raise petrol and diesel pump prices by 21 to 23 rupees a litre to stem losses amid rising oil prices, an official said. IOC managing director Suresh Kumar said his firm had lost about 15 rupees a litre on petrol last month on petrol and diesel and this month the loss had increased to between 21 to 23 rupees per litre.

Sri Lanka’s retail fuel prices are high because the government has imposed high taxes on petrol and diesel.

Petrol is retailed at 120.0 rupees a litre and diesel at 70.0 rupees, though import prices are low.

According to Central Bank data a price of litre of refined petrol in the Singapore wholesale market was only 55.14 rupees a litre yesterday based on the US dollar at 115.10 rupees and a barrel priced at 76.65 US dollars.

The price of refined diesel in Singapore was 56.29 rupees a litre (78.25 US dollars a barrel) and kerosene 56.61 rupees a litre (78.7 US dollars a barrel).

Usually petrol is the cheapest refined product to import, but Sri Lanka’s skewed taxation has under-priced diesel and made the fuel popular, forcing the country to spend more on imports.

Unleaded petr