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The Sri Lanka unit of Indian Oil Corporation has temporarily cut prices on its lubricants in a bid to claim a larger market share, according to local market sources.

Lanka IOC Plc. Managing Director K Ramakrishnan is reported to have said that the company is offering a five percent discount on lubricants until the end of October.

Lanka IOC's manufacturing costs have been significantly reduced since the plant was commissioned last November and the company began to produce lubricants locally instead of importing from India.

The reduction in price of lubricants will mean the company will be selling at "no loss - no gain" for the next two months, after which prices are expected to revert back to August levels, local sources report.

Lanka IOC is also understood to be interested in offering the use of its storage facility in Trincomalee to other companies in order for them to store their liquid cargoes. The lubricant producer is said to be currently in discussions with a number of firms.

News of Lanka IOC's price reduction follows comments made by Kishu Gomes, Director of Chevron Lubricants Lanka in a press conference last week, where he stated that under the present circumstances it would be extremely difficult for lubricant players to survive without local manufacturing blending plants in Sri Lanka.

He also stated that only about two or three players would be able to weather the storm over the next 3 to 4 years.