(MENAFN- Gulf Times) Sri Lankan fuel retailer Lanka IOC has raised retail prices for gasoline and diesel, the company said yesterday, due to losses incurred after the government's failure to
implement a pricing formula.
The move by Lanka IOC, one of two fuel retailers along with state-owned Ceylon Petroleum Corp (CPC), will put pressure on the government to raise prices at pumps, which are normally set in talks between the government and retailers.
Lanka IOC, a subsidiary of Indian Oil Corporation, said it had incurred losses during the last four consecutive quarters and the cumulative loss was Rs1.3bn ($8.35mn).
'Despite prices of petroleum products going up significantly, selling price of petrol and diesel has not been revised which has resulted in heavy losses to oil companies, Lanka IOC's managing directorShyam Bohra said.
'Increase in taxes and depreciation of the Sri Lankan rupee has also significantly affected the margins of oil companies.
Under pressure from the International Monetary Fund (IMF) to boost revenue, the government increased the excise duty on diesel by Rs10 to Rs13 per litre from August 20, but asked fuel retailers not to pass on the cost to consumers.
Lanka IOC, which has around a one-third market share in the country, increased the price of gasoline by Rs9 to Rs126 a litre and diesel by Rs5 to Rs100.
'By this increase itself our volume will come down. We will lose volume and market share with this increase, he said.
State-owned fuel retailer CPC said it had not taken a decision on whether to increase prices.
Bohra said his company was incurring a loss of Rs12 per litre of petrol and Rs17 per litre of diesel as of Friday, and the decision to raise the price was taken after the government did not act itself.
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