Lanka IOC posts marginal profits in Q3 2011

Lanka Indian Oil Corp. (Lanka IOC) posted a net profit of LKR 623 million (US$4.81 million) from October-December 2011, compared to LKR 602 million (US$4.65 million) a year ago. However, the company suffered loses in the retail marketing of petrol and diesel during the third quarter. Lanka IOC is a fully-owned subsidiary of Indian Oil Corp. and since the company does not have refining facilities in Sri Lanka, it imports diesel and petrol. “We have achieved this in spite of continuing to suffer losses in the core area of business, i.e. retail marketing of petrol and diesel through the petrol sheds. Profits have been realized in lubricants, bunker and bitumen sales,” said K.R. Suresh Kumar, managing director of Lanka IOC. At the end of October 2011, Sri Lanka adjusted the selling price of petrol from LKR 125 (US$0.96) per liter to LKR 137(US$1.05) a liter and diesel sold at LKR 84 (US$0.64) per liter, up from LKR 76 (US$0.58) a liter. “This helped to cut down the losses to an extent. However loss on diesel was LKR 21 (US$0.16) per liter even after the price revision,” Kumar explained. But with the rise in international prices of oil products, the government further increased the price of petrol to LKR 149 (US$1.15) and diesel to LKR 115 (US$0.88) in February. Kumar said that the effect of the most recent oil price hikes will be seen in Q4. (February 21, 2012)