Wednesday, 28 May 2003  
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IOC to supply LPG, aviation fuel to Sri Lanka

By Ravi Ladduwahetty

India's sole fortune 500 company-Indian Oil Corporation (IOC) which is the largest petroleum company in Asia and the Pacific, has announced its willingness to supply Liquid Petroleum Gas (LPG) and aviation fuel to Sri Lanka.

Indian Oil has already briefed Power and Energy Minister Karu Jayasuriya of its willingness to supply both products to Sri Lanka at a meeting yesterday.

IOC Chairman M.S Ramachandran, who is currently in Sri Lanka to launch the first IOC owned petrol shed here told the Daily News in an interview at the company's World Trade Centre office yesterday that his company was planning to come into partnership with Sri Lanka to supply aviation fuel following a new aviation fuel terminal being opened at the Katunayake International Airport today.

He said that IOC was also in a position to supply LPG following Sri Lanka's liberalisation of this product.

"We have the choice of two options which is either to import LPG in bulk into the terminal of Shell Gas Lanka Ltd terminal and fill the cylinders in Sri Lanka or to import the filled cylinder from a LPG bottling plant in South India," Ramachandran said. He said that Minister Jayasuriya was appreciative of the suggestions and negotiations will continue immediately.

IOC is the market leader for LPG in India accounting for 48 percent of the Indian market, supplying to 35 million households there.

He also said that his company has entered the Sri Lankan lubricants market following the payment of US$ 85,000 which was the entry criteria into the Sri Lankan market.

"We have already a marketing arrangement with David Peiris Motor Company Ltd, where we currently sell around 1,500 kilo-litres per annum, but this could be substantially increased with the removal of the disparities in the duty structure here," he said.

He explained that Caltex Lanka Ltd., to which the Ceylon Petroleum Corporation wholly owned subsidiary Lanka Lubricants was divested which had an advantage in the duty structure where it paid a preferential 10 percent duty while all other importers were subjected to a 20 percent duty levy. However, this disparity will be sorted out next year where there will be a level playing field for everybody.

He said that IOC had over 400 formulations in industrial and motor lubricants, where all were of the premium range conforming to API-SJ Standards, which are of a very high standard set out by the American Petroleum Institute. It is this IOC range of lubricants which are currently being used by the railway systems in Malaysia.

Meanwhile, Shri Ram Naik, Minister of Petroleum and Natural Gas arrived in Sri Lanka yesterday on a two-day visit to mark the first venture of the leading Navratna PSU Indian Oil Corporation (IOC) in a foreign retail market of petrol and diesel.

Shri Naik will launch Lanka IOC (Pvt) Ltd. (LIOC), a wholly owned subsidiary of IOC with the inauguration of a retail outlet in Colombo today as part of a chain of 250 retail outlets to be operated by IOC, LIOC has been formed by Indian Oil for operating in hydrocarbon downstream market of Sri Lanka.

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