“Unfair pricing,” claimed Piramal Glass Ceylon PLC this week referring to unchanged furnace oil prices by the Ceylon Petroleum Corporation (CPC) over the past few years.
In releasing its quarterly results for April-June 2017, the company reiterated earlier concerns that furnace oil prices have remained unchanged despite crude oil pricing crumbling overseas.
“There is concern that the Ceylon Petroleum Corporation has not revised the rates of furnace oil for the past four years. Crude oil prices which hit a US$120 a barrel in 2011 is now hovering below $50 in the past four years and as at date is a more than 50 per cent reduction in the prices. However the corresponding furnace oil prices and the need for a reduction based on international prices hasn’t been properly addressed. This state of affairs is affecting our competitiveness in the international market. The company has been requesting the government to introduce a pricing formula based on international crude oil price which will be a fair transparent pricing mechanism,” the company said in a media release.
Meanwhile, its first quarter 2017-2018 earnings fell marginally with revenue recorded at Rs. 1,403 million and post-tax profit at Rs. 105 million.
Sales during the first three months (April to June) was Rs. 1,403 million, down by 17 per cent from the same period in the earlier financial year.
The company said there was a major decline in the export market as per sales to India due to the changes in the tax structure with the announcement of GST implementation country wide. However ,all other geographical locations – Australia, US and Canada showed positive growth figures during the period under review.
Increase in the operational profit margin was possible due to the reduction of trading sales. “With the new facility now well stabilised the domestic market is being supplied mainly with in house manufactured bottles which has replaced the imported bottles. Last year due to capacity constraints a considerable portion of the domestic sale was done through imports,” the company media release said.
Even though operating profit rose, post-tax profit fell, affected by the high interest cost resulting from the long term loan of Rs. 3 billion borrowed to fund expansion.
In releasing its quarterly results for April-June 2017, the company reiterated earlier concerns that furnace oil prices have remained unchanged despite crude oil pricing crumbling overseas.
“There is concern that the Ceylon Petroleum Corporation has not revised the rates of furnace oil for the past four years. Crude oil prices which hit a US$120 a barrel in 2011 is now hovering below $50 in the past four years and as at date is a more than 50 per cent reduction in the prices. However the corresponding furnace oil prices and the need for a reduction based on international prices hasn’t been properly addressed. This state of affairs is affecting our competitiveness in the international market. The company has been requesting the government to introduce a pricing formula based on international crude oil price which will be a fair transparent pricing mechanism,” the company said in a media release.
Meanwhile, its first quarter 2017-2018 earnings fell marginally with revenue recorded at Rs. 1,403 million and post-tax profit at Rs. 105 million.
Sales during the first three months (April to June) was Rs. 1,403 million, down by 17 per cent from the same period in the earlier financial year.
The company said there was a major decline in the export market as per sales to India due to the changes in the tax structure with the announcement of GST implementation country wide. However ,all other geographical locations – Australia, US and Canada showed positive growth figures during the period under review.
Increase in the operational profit margin was possible due to the reduction of trading sales. “With the new facility now well stabilised the domestic market is being supplied mainly with in house manufactured bottles which has replaced the imported bottles. Last year due to capacity constraints a considerable portion of the domestic sale was done through imports,” the company media release said.
Even though operating profit rose, post-tax profit fell, affected by the high interest cost resulting from the long term loan of Rs. 3 billion borrowed to fund expansion.
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