Lanka Oil expects profit in 2011-12

Lanka India Oil Corp. (LIOC) expects to turn a profit in the 2011-12 fiscal year. The Sri Lankan arm of India’s state petroleum company, Indian Oil Corp., posted a net loss of Rs36.2 million (US$696 million) for the quarter which ended last June 30, compared to a Rs116.1 million (US$2.2 million) loss in the previous year. LIOC had been complaining to the Sri Lankan government, saying it could not compete with the subsidies that the government gives to state-owned fuel dealers. Sri Lanka, which is entirely dependent on imports, increased retail fuel prices last October, enabling LIOC to increase its prices to the same level as that of state-owned Ceylon Petroleum Company (CeyPetCo). “We’re still losing from diesel sales but if this trend continues with the same prices we could end up in profits for the financial year 2011-12,” LIOC Managing Director K. R. Suresh Kumar said in an interview with Reuters. Kumar said that LIOC is planning to increase lubricant exports by 54% to 1 million liters next year, from 680,000 liters currently. The company also plans to increase domestic sales by 12% next year, from the current seven million liters. The company offsets losses with lubricant sales, bunkering operations and bitumen sales. (October 31, 2011)