Price revision on diesel inevitable

By Lalin Fernandopulle

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Lanka IOC is losing Rs. 31 on a litre of diesel and a price revision was inevitable to face the rising global oil prices, Managing Director Lanka IOC, K. Ramakrishna said.

He said the government can do away with the Rs. 2.50 Excise Duty on diesel and Rs. 20 on petrol and grant an increase of Rs.15 on a litre of petrol and Rs. 10 on diesel.

The last price revision took place when the crude oil barrel was US$ 97 but today it is US$ 142.

The price of a litre of diesel was increased by Rs. 5 and a litre of petrol by Rs. 10. The price of a litre of diesel today is Rs. 80.

The cost per barrel of diesel increases by 70 cents for every dollar. World crude oil prices have been on an upward trend since the end of last year and many developing countries are facing difficulties to reduce their energy expenditure.

Lanka IOC which sells around 28 million litres of diesel per month incurs a loss of Rs. 868 million. The company makes a profit of Rs. 118 million on petrol a month. The selling price of fuel in Sri Lanka is low compared to many countries in the region.

In terms of Sri Lankan rupees the price of a litre of petrol is Rs. 137. 30 and a litre of diesel is Rs. 95.8 in India. Sri Lanka’s oil prices are lower than France, Germany, Italy, Spain and Japan.

Ramakrishna said there is profit from the lube oil blending plant in Trincomalee which produces around 300,000 litres per month. Lanka IOC is awaiting approval to set up 324 petrol sheds.