Lanka IOC has once again increased a hike in its retail selling prices of petrol with effect from last midnight today (March 25).
Thereby, the prices of all types of petrol have been increased by Rs. 49.00.
Lanka IOC said it is compelled to raise the petrol prices due to the unwanted conditions caused by the currency depreciation and soaring rates in the global market.
According to a statement issued by the company, the prices of diesel will remain unchanged.
“Consequent to floating of Sri Lankan Rupee by CBSL since 7th March 2022, Rupee is ceaselessly depreciating against the dollar, from initial level of 203 to more than Rs. 290 per USD during last 15 days, making fuel import costlier.”
Despite this exorbitant upward revision in exchange rates by more than 40%, the banks are still struggling to sense the liquidity in the foreign exchange inflow in the banking channels even over and above the official rate, Lanka IOC pointed out.
The statement further read: “Besides the domestic economic crisis, the global tension amidst the Ukraine-Russia war neared to one month with no conclusion in sight, causing concern over supply scarcity of oil, leading to an intense unforeseen rise in the international fuel prices setting a new high record in the last 14 years.”
Mr. Manoj Gupta, Managing Director LIOC, informed that “the oil companies are severely affected due to these unprecedented situations from all the corners, and they were compelled to increase the prices of Gasoline for sustainable business operations. However, regardless of huge losses in the selling of gasoil, LIOC has not revised the gasoil prices this time as a concern of the impact on the public. Even after this increase, there would still be losses on Gasoline at the prevailing international prices and exchange rates. The last fuel price revision by LIOC was done on the 11th of March when the exchange rate was prevailing at 260 against USD. The currency has depreciated further and while the CBSL TT selling rate is 285, the Licenced Commercial Banks are not able to provide USD even at the LKR rate of 300.
Unstable currency rates and steep depreciation against the USD has had direct impact on the landed cost of gasoil and gasoline making them costlier by an equivalent amount per litre. The global oil prices have also been pitched into turmoil by Russia’s invasion of Ukraine, with the US and Europe imposing penalties on Moscow and crude buyers shunning the country’s cargoes. In view of the uncertainty in the global market coupled with Sri Lanka country risk, the suppliers are quoting high premium for the supply of gasoil and gasoline.”
Mr Gupta further said, “We are very much optimistic that the situation will improve, and we shall be more than happy to pass on the benefits of reduced prices to give relief to our valuable customers under this economic hardship.”
He again emphasized that LIOC does not receive any subsidy from the Government of Sri Lanka and its losses are calculated based on the landed cost of the product after considering payment of applicable duties, taxes and other statutory levies including handling charges. “Being the only public limited energy company and accountable to its more than 10,500 local shareholders, Lanka IOC has always remained committed towards the economic and social upliftment of Sri Lanka even under these adverse circumstances,” the company’s statement read further.