July 22, 2011 (LBO) - The Sri Lanka unit of Indian Oil Corporation has said strong sales of bunker fuel to ships in the last three months of the last financial year helped offset losses in the previous three quarters.
Lanka Indian Oil Corp chairman G C Daga said that during the financial year ended March 31, 2011 the company "reoriented" its business strategies by enhancing focus on profitable business lines like lubricants, bitumen and bunkering.
LIOC made profits on the sale of petrol during the year but incurred losses in the sale of diesel.
"The positive margins realised from petrol, lubricants and bitumen helped offset the losses incurred on sale of diesel," Daga said in the company's annual report.
"Your company re-engineered its bunkering activities by removing bottlenecks in the supply chain and by developing a new system for improved delivery," he told shareholders.
"As a result, the loss suffered in bunker operations during the first nine months was all but wiped out by our strong performance in the last quarter."
The report said LIOC streamlined its bunker business with long-term supply contracts and better logistics during the last quarter of the year.
However, high prices forced it to reduce bunker sales during the middle of the financial year, which along with reduced sales of diesel towards the end of the year resulted in total product sales falling to 623,918 kilolitres from 646,520 KL the year before.
"Due to the prevailing high prices of the bunker fuels in international markets, the company adopted curtailed operations in this segment resulting in reduction of business volume by about 28 percent," the report said.
LIOC prices diesel five rupees higher than its competitor, state-run Ceylon Petroleum Corp., a former monopoly, whose pricing is controlled by government which subsidises fuel sales.
source - www.lbo.lk
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