Sri Lanka threatens to nationalise Indian Oil

Sri Lanka has threatened to nationalise the local unit of Indian oil unless it reduces the retail price of diesel, local officials said on Friday.

Petroleum Minister AHM Fowzie said the government will take over the 160 fuel retail depots operated by Lanka IOC, the local subsidiary of India’s state-owned Indian Oil Corporation (IOC), unless it makes the reductions. Diesel is commonly used by public transport. “Steps could be taken to re-vest the filling stations given to the IOC,” the minister was quoted as saying in the state-run Daily News.

Sri Lanka sold a third of its petroleum distribution network to the IOC in 2003 as part of a move to end the monopoly on retail sales. While the state-owned Ceylon Petroleum Corporation (CPC) sells diesel at Rs110 (1.02 dollars) a litre, the IOC sells it at Rs130. The CPC diesel is subsidised by the state. The government argues more motorists are buying the subsidised diesel and as a result, increasing losses are incurred by the state.

Lanka IOC said they were not able to absorb losses by selling diesel at the same price as CPC. “The minister wrote to us, asking to reduce our diesel prices to the same (level) as CPC or face sanctions,” Lanka IOC MD said.

Source: thenews