“Last month on petrol sales we made a profit of one rupee per litre,” said K R Suresh Kumar, managing director of Lanka IOC. “In the last eight months we have been making losses on petrol.” Last month’s profits from petrol sales are likely to turn into losses, while losses from sale of diesel fuel would continue to mount if the state refinery cuts the diesel price as well which LIOC would be forced to match, he said.
The state-run Ceylon Petroleum Corporation Tuesday slashed the price of a litre of 90 Octane petrol to 115 rupees from 130 rupees, and 95 octane petrol to 133 rupees a litre from 148 rupees.
Suresh Kumar of LIOC said the firm has been making losses on fuel sales because of government price controls. “We have been continuously losing on diesel (sales). In the previous two months losses were between 4.0 to 5.0 rupees. I still have not sat down with my team to go through the numbers.”
In September 2009 quarter, LIOC made a loss of 203 million rupees, after making a 110 million profit a year ago.
It made a 856.7 million rupee loss in the June quarter compared with a profit of 1.0 billion rupees a year earlier, as it was squeezed between high taxes and government mandated prices.
“We hope the government will take necessary action to rectify the situation,” Suresh Kumar said. “Oil companies can’t run at continuous losses.”
source - www.lbo.lk