Sunday 19 February 2017

Price controls hit Sri Lanka IOC unit as crude, taxes rise

ECONOMYNEXT - Sri Lanka's Indian Oil Corporation said December quarter profits fell to 80 percent to 257.5 million rupees in the December 2017 quarter from a year earlier, as taxes rose amid price control, interim accounts show.

Profits plunged 82 percent from 1,461 in the September quarter.

The firm reported earnings of 0.48 cents per share for the quarter.

Crude prices which fell to unusual lows of around 38 dollars a barrel in the first quarter of 2016 had risen to around 50 dollars by the fourth quarter with a steep increase taking place in the last quarter, data shows.

Revenues rose to 20.5 billion rupees in the December quarter from 18.1 billion rupees a year earlier, while cost of sales rose to 19.2 billion rupees, from 16.44 billion rupees.

Gross profit fell to 1.2 billion rupees from 1.7 billion rupees.

By end September the firm had 12 billion rupees of inventory, which had reduced to 8.0 billion rupees by December.

The firm said in August customs duty was increased by 6.0 rupees a litre in June 201 and excise import duty by 10 rupees in August.

Sri Lanka was supposed to have a price formula in place by December 2016 to prevent the economy and the rupee and the economy from being hit by credit taken to cover losses, but it did not happen.

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