Currency depreciation major concern in Sri Lanka: MD of Lanka IOC

Managing Director of Lanka Indian Oil Corporation, Manoj Gupta, says that Sri Lanka is undergoing the worst currency depreciation as the price of the US Dollar in Sri Lanka rose by over 50 per cent from Sri Lankan Rupees 203 to Rs 320, resulting in some of the banks charging as high as Rs 345 per USD.

In an exclusive conversation with ANI, Gupta said that the company is currently suffering a loss of Rs 125-120 per litre on diesel. He further said that they need a price revision.

"Our pricing to a great extent is dependent upon the international pricing. The main reason behind this loss and other economic problems is currency depreciation," he said.

Responding to the need for fuel by the big export houses, he said, "We have taken up this issue it gives me peace to share that we have received the approval of the Ministry of Energy, Ministry of Finance and the Central Bank of Sri Lanka."

Lanka IOC MD further said that they took up the subject with respective bankers but they have different requirements and hope that within 2-3 days, the problem could be solved. Furthermore, Gupta also said that if these issues are resolved, then the company would be able to import the fuel shipments.

He also said, "If we receive the dollars, then we can open up the Line of Credit. This will help us to revive the economic issue."

Referring to Lanka's IOC losses, Gupta said, "We don't get any subsidy from the government and if we continue to suffer losses we shall not be able to sustain ourselves. In case we sell, say, 20,000 to 25,000 litres of fuel per month by bearing a loss of Rs 100 per litre, we shall end up with a loss of around Rs 2 billion per month."

He said they are constantly making efforts not to put the burden on customers. "In June 2019, the price of diesel was Rs 104 and the prices remained the same for more than 2 years."

"Our prices remained in line with the national oil company for a very long period but the difference in prices started only recently in view of the steep rise in oil prices and currency depreciation. We were left with no other option," Gupta said, adding that they have recently taken a decision on the import of fuel for export/other sectors.

( With inputs from ANI )