Though Lanka Indian Oil Corporation continued to lose in retail marketing of petrol and diesel in the third quarter, it managed a net profit of LKR 623 million in October-December 2011 compared to LKR 602 million in the year-ago period.
The third-quarter results are significant because Lanka IOC, a fully owned subsidiary of Indian Oil Corporation, imports petrol and diesel and does not have refining facilities in Sri Lanka.
“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 realised in lubricants, bunker and bitumen sales,” said Mr K.R. Suresh Kumar, Managing Director, Lanka IOC, when asked about the marginal increase in profits.
Sri Lanka revised the selling price of petrol to LKR 137 a litre from LKR 125, and of diesel to LKR 84 from LKR 76 effective October-end 2011. “This helped to cut down the losses to an extent. However loss on diesel was LKR 21 per litre even after the price revision,” he said.
International prices began spiking from January this year. Faced with no alternative, the Sri Lankan Government again revised the selling prices in February: to LKR 149 of petrol and LKR 115 of diesel. “The effect of this will be seen in Q4,” he said.