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Indian Oil Corporation’s (IOC) Sri Lankan venture Lanka IOC (LIOC) had recorded Bunker Sales at an unprecedented growth of 20% during the year despite intense competitive pressures.

The Chairman of the company – Balwinder Singh Canth – in his latest annual review highlights that they sustained LIOC’s position by maintaining operational excellence and financial prudence as also by continuously improving the company’s procurement and distribution strategies.

LIOC had commenced exclusive bunkering operations at Trincomalee Port from June 2015 and to optimize the storage and operating costs and to bring valuable foreign exchange to the country, LIOC had commissioned storage of bunker fuels at its Trincomalee Terminal in February 2016.

The Chairman Canth notes that Trincomalee is the world’s 5th best natural harbour and provides an excellent opportunity to LIOC to meet the bunker needs of the vessels operating on the Bay of Bengal – Western Countries shipping route. LIOC is the 2nd largest player in Sri Lanka’s bunkering market, supplying fuel oil and diesel for vessels at berth and anchorage at the Colombo and Trincomalee ports.

LIOC currently operates one bunker barge with capacity for 400 MT of 380cst fuel and 400 MT of MGO. In addition to providing diversity to the Company’s earnings profile, the forex income generated from this business line enables LIOC to hedge against its foreign currency payments in the purchase of oil imports.

However, despite a growth of 20% the revenue declined by 31% due to the reduction in international prices. Overall bunkering had contributed 13% for company’s revenue. According to the officials of LIOC prospects for bunkering are promising, particularly given the strategic positioning of the Trincomalee port and its significant potential for growth. Despite under recoveries on auto fuels, LIOC generated a net profit growth of 19% amounting to Rs. 2,239 million for the year, upheld by strong top line growth in all product segments