Sri Lanka’s Indian Oil Company (IOC) owned fuel retailer Lanka IOC will be forced to implement its own pricing mechanism to minimise losses if the government fails to implement its proposed fuel price formula, the company had said on Friday to according to a Reuters report.

Lanka IOC’s Managing Director Shyam Bohra speaking to Reuters had said that “Cabinet approval is there, but the pricing of petroleum is a very touchy issue across the globe and the same is the case in Sri Lanka.”

He had further noted that “If the proper pricing mechanism is in place, we will follow it. If it is not, then we will have to sell our products at the cost plus whatever actuals are there.”

“Most likely it will be that we will have to have our own prices ... We can’t keep on losing money,” Bohra had told Reuters reporters. The move by Lanka IOC, comes after the government failed to increase fuel prices charged by state-owned Ceylon Petroleum Corp (CPC) in line with rising global oil prices.

According to financials, Lanka IOC posted a loss of 755.6 million rupees (US $4.79 million) in the year to March 31, against a 3.07 billion rupee profit in the previous year, mainly because of high global oil prices in conjunction with low retail prices for fuel.

Bohra said the government has yet to inform the company about the new pricing formula and said it should also be transparent for the public.

Reuters report added that on March 24 Lanka IOC raised its prices because of losses incurred after the government’s failure to implement a pricing formula for CPC. Finance Minister Mangala Samaraweera last week said that the cabinet has approved a price formula with revisions every two months. The government raised fuel prices last week after Lanka IOC raised its prices. President Maitripala Sirisena’s coalition government, which has pressed ahead with unpopular fiscal reforms since coming to power in 2015, has been hesitant to implement the fuel price formula before local elections. The coalition partners suffered a humiliating loss in local government polls in February.

The government had agreed in principle with an International Monetary Fund (IMF) requirement to implement the pricing formula in return for a $1.5 billion three-year loan approved in 2016.

The IMF on Thursday said that if the pricing formula is implemented properly, it “would eliminate fuel subsidies that benefit the rich rather than the poor”.

“We think that an automatic fuel pricing mechanism marks a major step toward completing the energy pricing reforms that are under way in Sri Lanka, and minimises the fiscal risks,” said Gerry Rice of the IMF’s Communications Department.