Lanka plans to reduce burden on oil marketing firms: Minister
New Delhi   03-Nov-2010

The Sri Lankan Minister of Petroleum Industries, Mr Susil Premajayantha, today said that his Government may rollout a “major reform” in tax structure in the forthcoming Budget presentation at end of this month.

“Most probably there will be some major reforms in tax structure in Sri Lanka,” the Minister said following a bilateral meeting with the Union Oil and Natural Gas Minister, Mr Murli Deora, on the occasion of Petrotech 2010, here today.

Sri Lanka would announce its annual Budget proposals on November 26.

Mr Premajayantha was replying to queries on the issues related to sale of subsidised auto-fuel by the state-controlled Ceylon Petroleum Corporation and revenue losses to Lanka IOC, an outfit of the Indian refining and marketing major IndianOil.

According to him, the tax reforms may reduce the tax burden on both the oil marketers in the country. The IOC sources later explained that the move would benefit LIOC if the Government allows the oil company to retain the benefits of reduced taxes. The IOC subsidiary controls 30 per cent of the retail auto-fuel market share in Sri Lanka.

To double capacity

Meanwhile, Sri Lanka is planning to double its crude refining capacity from 50,000 barrels a day to 100,000 bpd. The country will soon invite expression of interests in this regard. Plans are also afoot to convert its 1200-MW fuel oil based power stations into LNG based within next three years.

In another bi-lateral meeting, Mr Ed Stelmach, Premier of Alberta, invited Indian oil and gas sector to participate in shale gas and tar sand sectors in Alberta.