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Lanka IOC PLC has revised its prices upwards on two fuel products – Lanka Auto Diesel and Petrol 92 citing global spikes.
LIOC said retail selling prices for both Diesel (Lanka Auto Diesel) and Petrol (LP 92) by Rs. 5 per litre due to huge losses on sales of both the products. However, the prices of Lanka Super Diesel and LP 95 have been kept unchanged. The losses are around Rs. 40 per litre on sale of diesel and Rs. 20 per litre on sale of petrol at the current international prices.
Major petroleum entity State owned Ceylon Petroleum Corporation (CPC) is yet to announce hike despite urging the Government to grant same but analysts opined LIOC move was a signal.
LIOC said the last price revision took place on 12 June. However, since then the Brent crude oil prices have increased from $ 72/barrel to $ 86/barrel in the international market.
The recent unprecedented rise in international oil prices has breached the seven-year highs. As on date the international price of Gasoil 500ppm is $ 95.62/barrel and Gasoline92 is $ 99.37/barrel.
“LIOC has been left with no other option but to increase the prices of Petrol and Diesel as the quantum of losses have become unbearable,” the company’s statement added. It said that the company has increased the prices to the minimum, taking into consideration its impact on the industry and people at large.
When contacted, LIOC Managing Director Manoj Gupta informed that although losses are very high, presently the company has increased the prices to the barest minimum.
Lanka IOC is the only public limited energy company and said it is accountable to its over 10,500 local shareholders. “Such continuous losses for an indefinite period shall have a very detrimental effect on the financials of the company and its ability to invest to provide value added services to its customers,” LIOC said. However
It said the selling price of petrol and diesel in Sri Lanka remains significantly low as compared to the prices prevailing in the neighbouring countries. The prices of petrol and diesel need to be in line with the prices prevailing in the international market.
However, even after this price increase in diesel and petrol, LIOC will still have to bear significant losses at prevailing international prices for which they have been requesting the Ministry of Finance and Ministry of Energy to take necessary steps to provide relief to the organisation.
Whilst second quarter results are pending, in the 1Q of FY22, LIOC reported a pre-tax profit of Rs. 307 million as against a loss of Rs. 997.5 million a year ago. In FY21, it reported a profit of Rs. 882.6 million, more than double from Rs. 421.7 million in FY20.
LIOC also declared a first and final dividend of 85 cents per share for FY21 up from 75 cents paid for FY20.
