IOC expects Sri Lanka solution in 15 days

MUMBAI: Lanka IOC, in which Indian Oil Corporation holds a 75% stake, expects a solution to its $73-million oil subsidy demand to the Sri Lankan government in the next 15-days, NG Kannan, director, marketing, Indian Oil Corp, said on Monday.

Like in India, fuel prices in Sri Lanka are controlled by the government. This has resulted in oil companies there suffering huge losses. For the year ending March 31, Lanka IOC has reported a net loss of $70.1 million on revenues of $ 370.5 million. “We cannot service this burden ($73 million shortfall). Sri Lanka doesn’t have a concept of oil bonds (like in India), and hence the government is trying to work out a via-media to compensate us. We expect a solution in the next 15-days,” Kannan said.

Lanka IOC’s re-imbursement claims are being disputed by the government’s privatisation arm, the Public Reform Enterprise Commission. Lanka IOC had said that it will not replenish stocks unless the government moved to settle the subsidy claim. According to local media reports, the company has stock for under 40 days of diesel and 15 days of petrol requirements. Kannan said the company is mulling investing Rs 30 crore in the island nation to set up a 18,000 tonne per annum lube blending plant.