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Re: LIOC Community

Postby SHARK » Tue Sep 19, 2017 10:38 am

i agree SFSL.... seeing some qtys available @30 possible sell off might come in as we are couple of weeks away from the quarterly results..... yet again results may not favourable QoQ .....

so some pressure to fill the orders at the best price available for LIOC sellers. :-B
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Re: LIOC Community

Postby SHARK » Tue Sep 19, 2017 10:39 am

can we see the support tested around 28.50 and 28 levels .... few rupees below CMP
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Re: LIOC Community

Postby SHARK » Tue Sep 19, 2017 10:41 am

As we suggested earlier we should not take away the future earning potential the share has starting Q2/Q3 2018 a reasonable guess that GOSL will look at easing the pressure on LIOC and LGL
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Re: LIOC Community

Postby PAT » Sat Sep 30, 2017 4:10 am

Lanka IOC to increase prices of petrol and diesel in Oct.

Lanka IOC is likely to increase the prices of petrol and diesel in October according to industry sources.

LIOC officials said that due to huge losses, the company has been left with no other option but to increase the prices of petrol and diesel as the quantum of losses have become unbearable. They also said that they will increase the prices to the minimum, taking into consideration its impact on the Sri Lankan public.

When contacted, the LIOC Managing Director said that although losses were very high, the company would increase the prices to the barest minimum so as to prevent the company going into loses on an overall basis.

LIOC and the Ceylon Petroleum Corporation have been incurring heavy losses on the sale of petrol since January 2015 and diesel since September 2016.

The prices of petrol and diesel have further gone up significantly in the international market in recent months, but the selling prices of petrol and diesel have not been revised. As per the information available, oil companies at the currently prevailing international prices are losing approximately Rs. 17/L on the sale of petrol and approximately Rs. 14/L on the sale of diesel.

In June ’16/August ’16, taxes have been increased on diesel and due to this the positive margins to oil companies on diesel also got eroded. Significant depreciation of the rupee has also resulted in higher losses to the oil companies as they purchase the product in US dollars and sell petrol and diesel locally.

This matter has been repeatedly taken up by the oil companies with the concerned authorities, but the prices have not been revised.

The concerned officials are fully sensitised of this matter, but no decision has yet been taken either to increase the selling prices or decrease the taxes of petrol and diesel. Due to this, the operations of oil companies have become unviable.

The current prices were fixed in January 2015 and since then the prices of petrol and diesel have not been revised.

The selling price of petrol and diesel in the country remains significantly low compared to the prices prevailing in neighbouring countries.

Recently, the price of domestic LPG cylinder was increased by Rs. 110 per cylinder due to the increase in gas prices in the international market. Similarly, prices of petrol and diesel also need to be revised upward, keeping them in line with the prices prevailing in the international market and current exchange rates.
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Re: LIOC Community

Postby SHARK » Sat Sep 30, 2017 8:11 pm

The news is some breathing space for LIOC.
results of September would not be that great in my opinion as brent prices shot up to 55+ after hitting 59 last few days.

governments deliberate attempt to suppress the fuel price is not inline with social market economy.

by fearing loss of votes indirectly taxing people through other means.
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Re: LIOC Community

Postby Edmond » Sat Sep 30, 2017 10:24 pm

What is the government respond for this...? I mean with their coming election agenda...?

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Re: LIOC Community

Postby Rapaport » Sun Oct 01, 2017 7:41 am

Petrol prices to go up; CPC says will follow LIOC
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Fuel prices are set to increase soon, a senior government official cautioned yesterday. This follows a decision by the Lanka Indian Oil Company (LIOC) to increase its prices shortly, citing ‘heavy losses’ and fluctuating crude oil prices in the international market. A senior Finance Ministry official said last night that the Government had not taken a decision, but would be compelled to increase fuel prices if the LIOC increased prices.

‘If the LIOC increases prices, customers will naturally start buying Ceylon Petroleum Corporation (CPC) fuel. This may increase the CPC’s losses as the fuel is being sold at a subsidised price. Therefore, we will be forced to increase prices,” he said. He said fuel prices had not been increased for the past three years. Petroleum Resources Development Ministry Secretary Upali Marasinghe said if the LIOC increased prices, the ministry would have to take a decision regarding prices to prevent the CPC incurring losses.

He said that LIOC did not require government permission to increase prices. LIOC Managing Director Shyam Bohara said discussions were under way to decide on the date to implement the price increase.”It will all depend on the international prices,” he said. He said that the LIOC was at present losing Rs 17 from a litre of petrol and Rs 14 from a litre of diesel.

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Re: LIOC Community

Postby Rapaport » Sun Oct 01, 2017 8:02 am

How hard can it be to introduce a formula!!!!!

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Re: LIOC Community

Postby Rapaport » Sun Oct 01, 2017 8:05 am

Straw in the wind
September 30, 2017, 7:30 pm

Last week’s substantial increase in the price of cooking gas is, no doubt, a straw in the wind. There is little doubt that prices of automotive fuel – petrol and diesel – will also rise sooner than later. As it is, both the Ceylon Petroleum Corporation (CPC) and Lanka Indian Oil Corporation (LIOC), monopoly importers and distributors of automotive fuel, are racking up huge losses given the gap between procurement and selling prices. It was reported yesterday that LIOC intends raising petrol and diesel prices later this month on account of the huge losses it is currently incurring. CPC too is in the identical plight. It would make sense for both CPC and LIOC, with the regulator too participating, to reach agreement on what the price increases should be and both organizations revise prices simultaneously. But whether this would happen is something we must wait and see. There were occasions when it did not.

Motorists may remember a time when LIOC priced diesel a good bit higher than CPC. That was because they were making losses on diesel, as was CPC, and it was good business strategy to encourage motorists as well as public transport and haulage industries to tank up at CPC sheds and cut down LIOC losses at CPC expense! Strangely, there were people, though not many, who continued to patronize LIOC for their diesel despite the cheaper alternative. This could have been due to a myriad of reasons that may have included proximity of filling stations, credit, long term relationships etc. Whatever they be, LIOC did manage to reduce their diesel sales and consequent losses to the detriment of CPC. Of course the Indian company’s dealers lost out on very low commissions on diesel sales. Whether they were recompensed for that, we do not know. There had been some promises, we were told, but whether performance matched these is an open question. Nevertheless the situation did not prevail for long with CPC soon raising its selling price of diesel.

Soon after the present government came into office in 2015, there was a sharp reduction in fuel prices warmly welcomed by all. Public transport and haulage fleet operators, who benefited more than others on account of their large volume of consumption, did not reduce their charges and pass on the benefits of the price adjustment to their patrons. That surprised nobody. They never do and bleat about other costs rising closing their eyes to the fact that their profits too are doing likewise. Businesses that are quick to demand price revisions at the drop of a hat play deaf and dumb when the wheel turns the other way. We are already hearing noises from cooked food suppliers, be they sellers of lunch parcels or in the business of supplying hoppers and stringhoppers, for price revisions. Tea boutiques also want to increase their prices. This is inevitable because nobody does business for reasons of philanthropy. The pubic was told soon after the cooking gas price increases that Sathosa, the state cooperative, on the direction of the president, was reducing the prices or several varieties of rice, sprats, big onions and some other essentials. It remains to be seen whether the supermarkets will, or can, fall into line.

We do not know whether any fuel price increase will be announced in the 2018 budget that will be presented in November. Finance ministers, for obvious reasons, like to minimize budget shocks. It was Dr. N.M. Perera, as finance minister in Mrs., Bandaranaike’s United Front government of 1970 who refined the art of gazette before budget, gazetting price increases ahead of the annual budget ritual or soon thereafter. We must, of course, credit him for one thing he did at that time – reducing the price of cigarettes in one of his budgets, catching traders who hoarded stocks anticipating the near inevitable price increases flat-footed. But that was a one off. In this instance neither CPC nor LIOC can wait till November and as in the case of cooking gas fuel price increases are likely in days rather than weeks.

There has for long been talk of having a procurement price-related formula for the selling price of fuel. It was implemented at one time but had since been abandoned. This would be a sensible arrangement because petroleum importers and distributors cannot be expected to subsidize consumers and crude oil markets are often volatile. As it is the huge debts piled up at CPC, much of it by state agencies like the CEB and other public sector consumers, loads interest costs on the corporation. Eventually all this will percolate down to the consumer/taxpayer where the buck stops. While nobody will cheer more expensive fuel, the concerned authorities should seriously come to grips with mega problems like traffic jams that get worse by the day. The amount of fuel wasted in these disasters, substantially attributable to policy and planning faults, is not easily quantifiable. But the figure, to say the least, would be gargantuan.

It is easy to say that car owners, particularly, can do something about reducing fuel consumption. But the fact is that the majority of those swanking around the roads in opulent SUVs and luxury vehicles do not pay for their fuel out of their own pockets. Either the government or the companies they work for fill up their tanks or pay fuel allowances, often increased when prices go up. Those fortunates therefore do not have to bother about price increases. The unfortunates will grumble but do precious little about cutting down on unnecessary journeys or exploring possibilities of car pools in their neighborhoods. Given the condition of available public transport facilities, we will not ask them to use the bus or train to get to work. That will be akin to letting the bull loose on the man who fell off the tree!

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Re: LIOC Community

Postby Rapaport » Sun Oct 01, 2017 8:12 am

Sri Lanka SOEs an economic risk, IMF warns; interim energy price hikes ahead

ECONOMYNEXT - Sri Lanka's loss making state owned enterprises (SOEs) particularly in energy, are an economic risk requiring reform and market based pricing, an International Monetary Fund official said.

"An important priority is to accelerate implementation of structural reforms in public financial management and SOEs," IMF mission chief Jaewoo Lee said.

"Large financial obligations of SOEs pose fiscal risks and need to be managed by enhancing oversight …and following through on fuel and electricity pricing reform."

Lee said discussions with Sri Lankan authorities showed they were keen on implementing a pricing formula.

But in the interim price increases could be made.

Sri Lanka has already hiked liquefied petroleum gas prices.

An energy ministry official was quoted in the media saying that Ceylon Petroleum Corporation was owed 35 billion rupees in arrears by Ceylon Electricity Board.

Under an existing agreement with the IMF, Sri Lanka has said it wanted to put in place a pricing formula for fuel by March 2018 and electricity and electricity by September 2018.

For electricity, a so-called 'bulk supply account' which will make costs transparent has to be set up by the CEB, so that the regulator, the Public Utilities Commission of Sri Lanka, can approve prices.

The PUCSL has failed to raise prices in 2011 triggering the 2011/2012 balance of payments crisis, as the CEB and CPC borrowed around 200 billion rupees from banks to cover SOE deficits and the central bank printed money to keep rates down.

The 2015/2016 balance of payments crisis came as oil prices were cut and the central bank printed money to finance central government deficit after the deficit went off the rails following a so-called 100 day budget in early 2015.

The rupee collapsed from 131 to 152 to the US dollar in the crisis and inflation spiked over 7 percent as the price structure in the country changed.

In 2016 low oil prices allowed SOEs to repay debt, but in 2017 they had been net borrowers.

By matching selling prices to import costs a key risk SOE borrowings or printing money can be avoided, allowing the credit system and the central bank to be out of the equation.

Sri Lanka's central bank has a long history of trying to resist interest rate increases by printing money and defending the currency and printing more money to offset currency purchases (sterilized foreign exchange sales), triggering BOP crises.

At the moment the central bank is sterilizing foreign exchange purchases amid falling private credit and an improved budget deficit, after tax hikes to cover salary and subsidy hikes made in 2015.

The IMF also urged the central bank to stay ready to tighten policy if either inflation or credit picked up. (Colombo/Sept30/2017)

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Re: LIOC Community

Postby SHARK » Sun Oct 01, 2017 10:03 am

I am glad LIOC taken the BOLD initiative to increase to bare min.
wonder how the market would react tomorrow with a not so good quarter and decision of price hike.
will GOSL issue a statement before market open.
more likely GOSL will allow whilst maintaining CPC rates at same.
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Re: LIOC Community

Postby Rapaport » Sun Oct 01, 2017 1:19 pm

LIOC QTR report looks like a disaster

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Re: LIOC Community

Postby PAT » Mon Oct 02, 2017 5:10 am

Lanka IOC says have no option but to increase petrol, diesel prices this month

Oil companies in Sri Lanka, Ceylon Petroleum Corporation as well as Lanka IOC PLC have been incurring heavy losses on sale of petrol since January 2015 and diesel since September 2016. The prices of petrol and diesel have further gone up significantly in the international market in the recent months, but the selling prices of petrol and diesel have not been revised, Lanka IOC said.

"As per the information available, Oil companies at current international prevailing prices are losing approximately Rs. 17/Ltr on sale of Petrol and approximately Rs. 14/Ltr on sale of diesel. In June /August 2016, taxes have been increased on diesel and due to this, the positive margins to oil companies on diesel also got eroded. Significant depreciation of Sri Lankan Rupee has also incurred higher losses to the oil companies as they purchase the product in US dollars and sell petrol and diesel locally", the company said.

"This matter has been repeatedly taken up by the oil companies with the concerned authorities, but the prices have not been revised. The concerned officials are fully sensitized of this matter, but no decision has yet been taken either to increase the selling prices or decrease the taxes on petrol and diesel. Due to this, the operations of oil companies have become unfeasible," they further said.

When LIOC officials confirmed this situation and said that due to huge losses, LIOC has been left with no other option but to increase the prices of petrol and diesel as the quantum of losses have become unbearable. They also informed that they would increase the prices to the minimum, taking into consideration of its impact on the public of Sri Lanka.

When contacted, Managing Director of LIOC informed that although losses are very high, company would increase the prices to the barest minimum, so as to prevent the company going into loses on overall basis.

It may be noted that the current prices were fixed in January 2015 and since then prices of petrol and diesel have not been revised. The selling price of petrol and diesel in the country remains significantly low as compared to the prices prevailing in the neighboring countries. Recently, price of domestic LPG cylinder was increased by Rs. 110 per cylinder due to increase in gas prices in the international market. Similarly, prices of petrol and diesel also need to be revised upward keeping in line with the prices prevailing in the international market and current exchange rates, they said.
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Re: LIOC Community

Postby SHARK » Mon Oct 02, 2017 8:41 am

The right decision by the BoD taking into account their shareholders.
can some one confirm the increase :)

please note there can be some trading opportunity *-:)
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Re: LIOC Community

Postby SHARK » Tue Oct 03, 2017 9:17 am

some limited upside was monitored, giving trading gains. will wait for the quarterly results and see if any possible sell off before the RISE
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Re: LIOC Community

Postby Contra » Tue Oct 03, 2017 11:27 am

SHARK wrote:some limited upside was monitored, giving trading gains. will wait for the quarterly results and see if any possible sell off before the RISE


Now it is time to look for some stagnated stocks as well before they wake up.
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Re: LIOC Community

Postby SHARK » Wed Oct 04, 2017 4:13 pm

Still price increase not effected .....
can someone confirm.
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Re: LIOC Community

Postby SHARK » Fri Oct 06, 2017 3:05 pm

The Joint Working Group (JWG) between India and Sri Lanka is currently having negotiations on the establishment of a joint venture to develop the Trincomalee Oil Tank Farm, an official said yesterday.

The JWG has been set up to explore developments of roads, the petroleum sector and the Trincomalee port and power projects.

Managing Director Lanka Indian Oil Company Shyam Bohra told the Daily Mirror the government to government talks were taking place through the JWG to work out modalities for the development of the Oil Tank Farm in Trincomalee.

However, he said no final decision had been taken yet in this regard. The Memorandum of Understanding (MoU) was signed in this regard earlier.

LIOC uses 15 out of 99 tanks for fuel storage at the moment. The joint venture is to be established to operate the remaining 84 tanks in the upper farm.

Asked about fuel prices, Mr. Bohra said LIOC would revise the prices this month unless the government reduced taxes.

“We can survive if taxes are reduced. Otherwise, we have to revise the prices,” he said. (Kelum Bandara)
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Re: LIOC Community

Postby SHARK » Fri Oct 06, 2017 9:24 pm

What will be the investments....... by both parties...... how the shareholders be treated ....will new shares be issued for the investment. or this be taken as a loan ....

when will LIOC inform the public.

Shouldnt they keep us updated ..... at least about the frame work.
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Re: LIOC Community

Postby SHARK » Tue Oct 24, 2017 3:57 pm

LIOC update ....

Brent price hovering 57.70$/barrel

back in Feb 2016 it was around 35$

63% increase since then.....

The issue is the diesel tax that introduced (aug-sep 2016) during former FM RK.

twice it was revised if i remember.

Which is hurting them.

Will GOSL agree some sort of short term arrangements to offset the under-recoveries/losses in the future ?

Thats a possible scenario.

The budget will pave the way to finalise the formula starting April 2018 at least ......

During this time how will the LIOC SP behave.

We have witnessed a STRONG Support around 30Rs holding.

What will be reaction by retailers when the results are out in few weeks time....

Will they sell below 30 and and provide opportunity to collectors.

If in case retailers panic, collectors should be waiting around 27.50 or 25 for accumulation.

but onething is really sure that once the formula is introduced, we should see some fireworks.

the question for traders is will 30 be the strong support it had been able to hold all these quarters.....
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Re: LIOC Community

Postby newer1 » Tue Oct 24, 2017 4:13 pm

Thanks shark.
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Re: LIOC Community

Postby SHARK » Tue Oct 24, 2017 4:30 pm

LIOC is seen with tripple MACD positive divergence.

So recommended to Buy on DIPS.

30Rs-31Rs &
27.50-25Rs (If need arise)

Target within 1 Year (provided price formula in place by april 2018) = Rs 45

ST target 34-35
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Re: LIOC Community

Postby SHARK » Tue Oct 24, 2017 4:58 pm

Are you looking for double baggers in few years time ...... then dont look any further.

collect without noise ......keep for the LT

LIOC in its hay time will deliver super capital gains.

Time is not just right, few more quarters from now.....

in my honest opinion LIOC should trading around 10PER to 1.5 to 2 times of its BV.
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Re: LIOC Community

Postby SHARK » Tue Oct 24, 2017 5:13 pm

SHARK wrote:30 to 34 appreciation was silent ....
@35 there can be some RES .... with QoQ reports coming out.....

My expectation : Results may not be that good and i feel it would be below QoQ.

Will LIOC pass 35 or will it get corrected for short term towards 32 in the coming weeks.....

do your analysis and take decision....

Traders : realise profit
Investors : accumulate on possible pullbacks


This was what i said in late July... when LIOC appreciated to 34.80

The price corrected back to 29.50s.

80% use for LT and 20% for trading.

Accumulate at DIPS
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Re: LIOC Community

Postby Rapaport » Tue Oct 24, 2017 5:18 pm

Also a big factor is fear and emotions amongst our politicians and CPC workers

As soon as LIOC starts making profits, they become edgy and restless because CPC is no where close to their efficiency!
Rulers drop their tongues out and salivate like hungry dogs and feel entitled to skim the profits through taxes! Easy big bucks for treasury!
And then opposition (patriots) join the bandwagon claiming people are ripped off by foreign companies making huge profits!

Its more political I feel!

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