The government that is not bowing to the Supreme Court order to reduce petrol price to Rs. 100 is now putting pressure on Indian Oil Corporation (IOC) to stop selling petrol at the reduced prices.
IOC suspended distribution of fuel this morning (24) but restarted it at 12 noon.

Shortwhile ago IOC Director Mr. Suresh Kumar said They will increase price of petrol as corporation price that Rs.122/- from midnight today.

The trade unions of the Ceylon Petroleum Corporation (CPC) point out that the daily income of the CPC has declined by 30% by yesterday (23) since the CPC fuel stations are not selling petrol at the reduced price.

While the income of the IOC has increased by around Rs. 40 million a day, the income of the CPC has dropped by the same amount, say the trade unions.

IOC has imported 15,000 metric tons of additional stocks of fuel since the sale of petrol has gone up rapidly at IOC sheds.

Meanwhile, trade unions point out that the CPC will not have sufficient storage facilities to stock the fuel refined since the decline of sales and the controlled distribution.

The refinery produces 550 metric tons a day and the daily demand for petrol is 700 metric tons. Trade unions point out that the refinery cannot stop production and the surplus will have to be sold to IOC at world market price since there are no sufficient storage facilities. They say that it is the only option available despite the fact that it is a loss to CPC.

40 million liters of petrol is sold in Sri Lanka and 26 million liters out of it is sold by CPC. Thus the CPC sells 312 million liters of petrol annually. Government says that the loss to the CPC if petrol is sold at Rs. 100 is Rs. 22. Therefore, the loss for the whole year is Rs. 6864 million. However, the trade unions point out that the saving or the profit from the suspension of the hedging agreement is Rs. 70,000 million for just six months.

Thus the loss the government say it is incurred by selling petrol at Rs. 100 is one tenth of the profit gained by the suspension of hedging agreement.