Lanka IOC to increase prices of petrol and diesel in Oct.

Lanka IOC is likely to increase the prices of petrol and diesel in October according to industry sources. 

LIOC officials said that due to huge losses, the company has been left with no other option but to increase the prices of petrol and diesel as the quantum of losses have become unbearable. They also said that they will increase the prices to the minimum, taking into consideration its impact on the Sri Lankan public. 

When contacted, the LIOC Managing Director said that although losses were very high, the company would increase the prices to the barest minimum so as to prevent the company going into loses on an overall basis.  

LIOC and the Ceylon Petroleum Corporation have been incurring heavy losses on the sale of petrol since January 2015 and diesel since September 2016. 

The prices of petrol and diesel have further gone up significantly in the international market in recent months, but the selling prices of petrol and diesel have not been revised. As per the information available, oil companies at the currently prevailing international prices are losing approximately Rs. 17/L on the sale of petrol and approximately Rs. 14/L on the sale of diesel. 

In June ’16/August ’16, taxes have been increased on diesel and due to this the positive margins to oil companies on diesel also got eroded. Significant depreciation of the rupee has also resulted in higher losses to the oil companies as they purchase the product in US dollars and sell petrol and diesel locally. 

This matter has been repeatedly taken up by the oil companies with the concerned authorities, but the prices have not been revised. 

The concerned officials are fully sensitised of this matter, but no decision has yet been taken either to increase the selling prices or decrease the taxes of petrol and diesel. Due to this, the operations of oil companies have become unviable. 

The current prices were fixed in January 2015 and since then the prices of petrol and diesel have not been revised. 

The selling price of petrol and diesel in the country remains significantly low compared to the prices prevailing in neighbouring countries.  

Recently, the price of domestic LPG cylinder was increased by Rs. 110 per cylinder due to the increase in gas prices in the international market. Similarly, prices of petrol and diesel also need to be revised upward, keeping them in line with the prices prevailing in the international market and current exchange rates.