State-set fuel prices weigh on Lanka IOCs results

Indian Oil Corp.’s Sri Lankan arm, Lanka IOC, warned that it could post another quarterly loss due to its inability to link retail fuel prices to global crude oil prices. K.R Suresh, managing director of Lanka OIC, mentioned in an interview with Reuters that there is a cause for concern because it has been requesting the government for a pricing formula. It lost Rs116.1 million ($1.04 million) in the quarter versus a loss of Rs856.7 million (US$7.66 million) a year ago. The absence of a price-adjustment formula has compelled the firm to diversify from its core business of petrol and diesel sales, to bunkering and lubricants, which helped cover losses in the past. (September 24, 2010)