IOC seeks subsidy payments

Indian Oil Corp. has started negotiating with the Sri Lankan government for the settlement of close to US$70 million (Rs crore) due to the company in the form of unpaid subsidy. The issue is likely to be settled soon, IOC chairman Sarthak Behuria said. The Sri Lankan government stopped providing subsidy to the company last August, after bringing in a free-pricing regime, but continued to give subsidy to Ceylon Petroleum Corp, the state-owned competitor. After the abolition of the subsidy regime, LIOC’s market share in fuel dropped to 11%, forcing it to resort to price increases. (September 6, 2006)