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The Sri Lankan subsidiary of Indian Oil Corporation has raised fuel prices by 7 percent to keep pace with soaring global oil prices. Prices of gasoline will go up from 98 rupees to 105 rupees from today, while diesel moves up from 66 rupees to 73 rupees, Lanka IOC Managing Director K Ramakrishnan said. From August LIOC was allowed to fix its own prices across its 160 fuel outlets after Colombo ran up USD 71 million worth of unpaid bills and agreed to settle them in cash and bonds. State-run Ceylon Petroleum Corporation or Ceypetco, which controls two thirds of the retail fuel market, currently sells gasoline at 96 rupees and diesel at 64 rupees. Ceypetco has not announced a fuel hike yet. Ramakrishnan says the 7 percent price hike allows the company to cover retail selling costs. Lanka IOC is 75 percent owned by Indian Oil Corporation, with the remaining 25 percent listed on the Colombo Stock Exchange. This week, LIOC reported a net loss of 584.0 million rupees for the three months to June, citing unpaid subsidy payments of 116.0 million rupees due from the Lankan government. A unit of the Fortune 500 company, LIOC said it ran out of cash to replenish stocks as Colombo failed to settle millions of dollars in subsidies for selling fuel at government-controlled prices. During April-June total sales rose to 8.93 billion from 8.13 billion recorded in the same period 2005. The firm made a 337 million net profit during the first quarter of 2006.
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