LIOC lube blending plant to replace Indian imports

by Lalin Fernandopulle

Lanka Indian Oil Corporation (LIOC) is planning to commence operation of its lube oil blending plant in Trincomalee by July this year to replace imports of finished lubricants from India.

LIOC Managing Director K. Ramakrishnan said the production facility in Trincomalee will not only fulfil the needs of the local lubricant market but also the export market.

"The company will explore the possibility of exporting lube oil to the Maldives, Bangladesh and Mauritius and many other countries in the region this year," Ramakrishnan said.

He said that LIOC competes with key players in the lubricant market and is confident of increasing the 13 percent market share to around 20 percent this year.

With regard to the present state of the plant, he said work on the project is continuing with the support of the Government and that there is no security threat.

"The LIOC has invested Rs 600 million on the project and targets a production of 18,000 mts of lube oil per year. The company obtained technical support from the Indian Oil Corporation for the permanent facility," he said.

He said the company is planning to move into the bunker fuel market within two months by importing and selling. We will add our diesel to furnace oil to supply ships calling at Trincomalee.

Ramakrishnan said LIOC is willing to join in petroleum exploration work in Mannar and are awaiting the Government's call for tenders.

The Oil and Natural Gas Company, ONGC (Pvt) Ltd. India was selected to carry out oil explorations in a block.

"LIOC has sought approval for a Rs. 7 increase per litre of diesel due to the escalating world oil prices. The company spends US $ 81 per barrel on diesel and incurs a Rs. 7 loss per litre. We reduced the price of diesel to Rs. 64.50 per litre when the world market price was Rs. 67 per litre last year," he said.

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