COLOMBO Dec 1 Sri Lankan fuel retailer Lanka
IOC put up prices for its premium brands on Thursday, three
months after the government increased the duty on oil products,
and said it will have to raise other petrol prices if the
government fails to hike official prices.
The move by Lanka IOC Plc, one of two fuel
retailers along with state-owned Ceylon Petroleum Corp (CPC),
will put pressure on the government to raise pump prices, which
are normally set in talks between the government and retailers.
Under pressure from the International Monetary Fund to boost
revenue, Sri Lanka's finance ministry increased the excise duty
on diesel by 10 rupees to 13 rupees per litre from Aug. 20,
stipulating that fuel retailers could not pass on the cost to
Lanka IOC Plc, a subsidiary of Indian Oil Corp,
said in September that the government's decision was likely to
hit its 2016/17 second-half earnings.
"We increased only the prices of premium brands," Lanka
IOC's managing director Shyam Bohra told Reuters on Thursday on
the phone from India.
"The government didn't increase the retail prices but
increased the taxes. We cannot sustain as we are making losses
and there should be a pricing formula."
Lanka IOC increased the prices of premium brands of XTRA
PREMIUM Euro 3 by 2 rupees to 123 rupees a litre and XTRA MILE
by 2 rupees to 99 rupees a litre, but kept the prices of other
products in line with Ceylon Petroleum Corp (CPC).
Bohra said his company was incurring a loss of 17 rupees per
litre of petrol and two rupees per litre of diesel as of
Wednesday, and would be forced to raise prices if the government
did not act itself.
Lanka IOC had previously been cushioned against losses in
petrol since December 2014 by the profit margin offered by
diesel sales, he said.
Petroleum Minister Chandima Weerakkody said in August that
CPC would also incur a loss of about 2 billion rupees a month
after the increase in diesel duty.
Shares in Lanka IOC were trading up 0.5 percent at 34.50
rupees at 0533 GMT on Thursday in early trade.
(Reporting by Ranga Sirilal; Editing by Richard Pullin)