New Delhi, July 10 (IANS) India's state-run refiner Indian Oil Corp Monday said there was no threat from Sri Lanka to take over its retail outlets in the island nation but admitted there were difference over subsidies and hoped the issue will be resolved soon.

Several of the 162 outlets of Indian Oil in Sri Lanka have run out of petrol due to a financial crunch, caused by the differences between the government and the company over pricing of the commodity and the subsidy payment, officials said.

"There is an issue of an outstanding amount of $70 million due to subsidies on petroleum products," Indian Oil chairman and managing director Sarthak Behuria said. The subsidy issue has been pending since July 2004.

"The Sri Lankan government has given us revised pricing and subsidy proposals that are being legally examined. We hope the issue would be sorted out soon," Behuria told IANS.

The Indian Oil chief denied reports that the company's subsidiary in Sri Lanka - which is listed on the Colombo Stock Exchange - had suspended operations on its own because of the differences.

The company's subsidiary - Lanka Indian Oil Corporation - operates 162 out of the 1,000-odd-retail outlets in the island nation and has a 32 percent market share in retail fuels and 16 percent share in the lubricant business.

Behuria declined to comment on Sri Lankan Oil Minister A.H.M. Fowzie's reported threat to take over Indian Oil's retail outlets if it does not resume the sale of petrol within 30 days.

Some outlets had gone dry due to the lack of funds to source the supplies but the company was continuing to operate despite the financial crunch, he said.

"The Sri Lankan company is facing a severe crunch due to the lack of working capital. But as and when the funds are available, the LIOC is importing petrol and diesel for operation of the retail outlets."