Monday, July 10 2006 11:56 Hrs (IST) - World Time -

Colombo: Sri Lankan Government has warned the local arm of the Indian Oil Corporation that it will take over all its fuel outlets if the company did not resume sales within 30 days.

The petrol stations of the Lanka-Indian Oil Company (LIOC) had gone dry after it stopped imports following a dispute with the government over US$ 71 million in payments to cover subsidies.

Minister of Transport and Petroleum Development A H M Fowzie has decided to take over all fuel retail outlets unless sales was restored within the 30-day deadline, the state-owned 'Sunday Observer' newspaper reported today.

"I have given them an ultimatum of 30 days to import petrol and sell at their outlets," Fowzie was quoted as saying," he said.

"If they fail to comply with my order I'll be compelled to acquire all IOC outlets." LIOC has been saying the government owes it the money for selling fuel at state-specified prices which were below its cost of production," he said.

A compromise was agreed last month with LIOC getting some of that money by way of government bonds. But its bunkers were still without petrol as the company said it would take 10 days to two weeks to have the supplies fully restored.