Sri Lanka IOC unit prepared for daily fuel pricing: official
Feb 06, 2019 10:00 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Lanka IOC, a publicly traded unit of the Indian Oil Corporation, is ready for daily fuel price adjustments if Sri Lanka moves in that direction, Managing Director Shyam Bohra said.
Sri Lanka's Finance Ministry now announces monthly fuel prices based on a pricing formula on the 10th of the month, though there are concerns whether it is cost reflective.
In free countries, the government does not intervene in prices, taxes are stable and distributors compete on branding and pricing.
As part of liberalization, India first started fortnightly pricing and now has daily pricing.
Lanka IOC says it can implement daily pricing if the government gives the go ahead.
"If we are allowed to adjust prices daily we can do it," Bohra said. "Dealers will not lose over the longer term. Over a period, on one day they will gain, on the other day they will lose. Over a year it will even out."
The firm pays a 3 percent margin to dealers.
Lanka IOC can independently price products at the moment. It is selling petrol above the state-run Ceylon Petroleum Corporation, which is following a government-announced formula.
In the December quarter, Lanka IOC lost 986 million rupees, with gross profits falling to 67 million rupees from 277 million rupees a year earlier.
The December quarter saw multiple price cuts amid a political crisis where the finance minister was changed by President Maithripala Sirisena. (Colombo/Feb06/2019 - SB)