Lanka IOC urges government to raise fuel prices, Energy News, ET EnergyWorld

Colombo: Lanka IOC (LIOC), the subsidiary of the Indian Oil Corporation in Sri Lanka, on Monday urged the government to approve a hike in retail fuel prices due to the current situation regarding world oil prices, said here a senior official of the company.

LIOC Managing Director Manoj Gupta said they are awaiting approval from the Sri Lankan government to increase the price of gasoline by Rs 20 / liter and diesel by Rs 30 / liter.

The Sri Lankan government suspended the expected hike in retail fuel prices despite rising prices for cooking gas and other essentials last week.

“The price of crude oil in the international market is currently between $ 83 and $ 94, up from $ 65 four months ago, as a result of which LIOC suffered huge losses,” Gupta said.

At the same time, he added that the determination of the retail price is at the discretion of the company. “We are only consulting the Sri Lankan government because of the current situation,” he said.

LIOC has been operating in Sri Lanka since 2002 and operates more than 200 retail service stations serving approximately 12 percent of the country’s fuel market.

The state-run Ceylon Petroleum Corporation (CPC) also urged the government to approve the price hikes.

Sri Lanka has requested a $ 500 million line of credit from India to pay for its crude oil purchases amid a severe currency crisis in the island nation.

The move came days after Energy Minister Udaya Gammanpila warned that the current availability of fuel in the country can only be guaranteed until next January.

State-owned petroleum distributors import crude from the Middle East and refined products from countries like Singapore. Rising global oil prices have forced Lanka to spend more on oil imports this year.

The country’s oil bill jumped 41.5% to $ 2 billion in the first seven months of this year, compared to a year ago. Lanka faces a severe currency crisis after the pandemic hit the country’s income from tourism and remittances, Finance Minister Basil Rajapaksa said last month.

The country’s gross domestic product contracted a record 3.6 percent in 2020, and its foreign exchange reserves plunged by more than half in a year through July to just $ 2.8 billion. of dollars.

This has led to a 9 percent depreciation of the Sri Lankan rupee against the dollar over the past year, making imports more expensive.

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