Lanka IOC posts $21.77 mn net profit

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Colombo, May 30: : LIOC, the Lankan arm of Indian Oil Corporation, has announced a net profit of 21.77 million dollars for 2007-08, a turnaround from the losses of 6.38 million dollars registered in the previous fiscal.

The annual turnover of LIOC for 2007-08 stood at 44.8 billion Sri Lankan rupees against 32.8 billion rupees during the previous fiscal, a rise of over 36 per cent.

The company registered a net profit of 890.7 million rupees for the last quarter of the 2007-08, against a profit of 830.6 million rupees during the corresponding period of the previous year.

The Managing Director of Lanka Indian Oil Corporation, K Ramakrishnan, attributed the profits to the Sri Lankan governments timely decision to increase fuel prices in line with rising global crude oil prices.

Besides, the company has also striven to minimize exposure to losses on the sale of petrol and diesel due to delay in price correction.

Last year, the Sri Lankan government raised prices of petrol and diesel seven times, which pushed up the inflation rate in the country to over 20 per cent.

This month too, the government raised the prices of petrol and diesel after hiking the rates in January.

LIOC, last year, received oil bonds worth 4.46 billion rupees from the government as compensation for underpricing the fuel.

Aiming to improve its profits during 2008-09, LIOC has decided to double its lubricant production to six lakh litres monthly to save on imports from India.

"We produce 3 lakh litres of lubricants at our Trincomalee refinery in Eastern Sri Lanka and will be utilising the capacity to double output," Ramakrishnan said.

He said there would be no additional investment required for doubling the lubricant output in Sri Lanka as the Trinco refinery can produce up to 6 lakh litres monthly.

He, however, said some ingredients such as base oil for the lubricants would still have to be imported. As against the monthly demand of 5 lakh litres of lubricants supplied by LIOC, the Trinco plant of the Indian company produces 3 lakh litres monthly as of now.

By enhancing the capacity of its USD 5.5 million lubricants blending plant in Trinco, it would not only attain self sufficiency in the local lubricants market but will also have additional supplies, Ramakrishnan said.