Lubricant player calls for an effective regulator

18 March 2014 04:41 am Views - 6275

The Public Utilities Commission of Sri Lanka, which operates as the shadow regulator in the absence of a proper regulator, has not been empowered to deal with the issues confronting the lubricant industry, a top official of Sri Lanka’s largest lubricant industry player stated.

“The necessity for an effective regulator is an urgent need of the hour from the perspective of all stakeholders,” Chevron Lubricants Lanka PLC Managing Director/CEO Kishu Gomes said in his review to the company annual report 2013.

The CEO pointed out that the further issuance of licences to new players in a relatively small market, product adulteration in various forms and rebranding and distribution of products by nonlicenced players were among the issues the industry faced due to the lack of proper regulation.

“While all big global and regional lubricant players have a presence in the Sri Lankan market, with 13 players operating in a market that is relatively small with a potential of 55 million litres per annum, the Ministry of Petroleum Industries has initiated action to award further licences to new entrants to the lubricants industry,” he said.

 Gomes noted that while more competition may be good for the consumer, it becomes imperative to bring about the right regulations and put in place a legal framework to ensure sanity in the market for fair play and to safeguard the consumers.

Although this issue has been brought to the notice of all stakeholders by the industry players, there has been no success.

“It is hoped that the government be judicious in issuing licences to more players, as this could have an adverse effect on the industry as a whole,” he further stated.

Gomes went on to state that product adulteration in various forms is also continuing, posing a serious risk to the consumer.

“The rebranding and distribution of products by non-licenced players also continues unabated while ‘cross filling’, the filling of products to containers proprietary to other players thereby misleading the customer and avoiding duties and taxes to the government coffers in some cases,” Gomes added.

He is of the view that with the increased number of players that may enter the market in 2014, these issues are likely to get aggravated.