IndianOil's Lankan arm signs settlement agreement with GoSL

New Delhi, Jan 10 (UNI) IndianOil's subsidiary, Lanka IOC Ltd (LIOC), has signed a settlement agreement with the Government of Sri Lanka (GoSL) for compensation of its under-realisation in sale of petroleum pruducts in the island nation.

As per the terms negotiated, a total sum of Rs 308 crore was the outstanding under-realisation for the January 2004 to June 2006 period, of which a sum of Rs 93 crore was received earlier from the GoSL.

The remaining amount of Rs 215 crore has been settled in full, with Lanka IOC receiving a cheque for Rs 29.17 crore and the balance Rs 185.83 crore in the form of Government Bonds, IOC said in a statement.

The agreement was signed at Colombo last Friday by LIOC Managing Director K Ramakrishnan and GoSL Deputy Secretary to the Treasury Abeysinghe in the presence of IndianOil Chairman Sarthak Behuria.

These Bonds are non-tradable in nature, bearing an interest rate of 11 per cent and a maturity period of two years.

Effective July 1, 2006, pricing of petrol and diesel has been de-regulated in Sri Lanka and the players have been allowed to fix the end-prices reckoning market conditions.

Consequently, no subsidy is payable to Lanka IOC by GoSL beyond June 30, 2006. Meanwhile, Lanka IOC has also laid the foundation for an 18,000 tonnes lube blending plant being constructed at a cost of Rs 22 crore for commissioning by June 2007.

LIOC is making phased investments to the tune of about Rs 450 crore to provide quality petroleum products and services at the most competitive prices to the Sri Lankan customers.

UNI