India Oil wants to market aviation fuel in Sri Lanka

Having stabilised operations to retail transport fuels in Sri Lanka, the Lanka Indian Oil Corp, a subsidiary of India's state-run oil company, will ask for Colombo's permission to market aviation fuel.

"We are applying to the government to participate in the aviation fuel marketing and we are ready to develop infrastructure facilities for it," the managing director of Lanka Indian Oil Corp, K Ramakrishnan, said.

He said that Lanka IOC had offered to build its storage facilities and supply aviation fuel at the Katunayake international airport near here or the new airport at Weerawila, some 300 km away.

At the moment, the state-owned Ceylon Petroleum Corp (CPC) has a monopoly in marketing aviation fuel in this island nation.

"In the event of the government granting us the permission, we will augment CPC in the marketing of aviation fuel. But keeping it as a monopoly may not be desirable for a growing economy like Sri Lanka," Ramakrishnan said.

"We are hopeful that we will get permission to develop infrastructure and import aviation fuel to Colombo and Trincomalee ports and do the marketing," he said, adding they were also seeking to expand the retail outlets to 324 from 152.

The company, a subsidiary of the Indian Oil Corp, in Sri Lanka, was incorporated to retail petroleum products, bulk supplies to industrial consumers and also to build and operate storage facilities at the Trincomalee.

Ramakrishnan said that the government of Sri Lanka would also be approached for another fuel price increase in the near future because global oil prices had shot up further. He, nevertheless, said the company was making impressive profits.

He said the company was expected to log a turnover of around $400 million for the year ended March 31. "This will prove Lanka IOC is the number one company in terms of turnover among private enterprises in Sri Lanka."

Lanka IOC imports petroleum products in two ports at Colombo and Trincomalee and keeps stocks ay both places. In November last year, it commissioned a $5 million lube oil blending plant with the capacity of 18,000 tonnes a year.

"Even at the beginning stage we are doing pretty well in this plant and blending some 300,000 litres of lubricants a month. We have larger plans for Trincomalee oil tank farm which has 850 acres of land with a very good jetty nearby."