Govt. moves ahead with further liberalisation of lubricant market

• Plans afoot to issue import licences to manufacturers who require lubricant in small quantities 
• Also, to issue new licenses to import lubricants according to original engine manufacturers’ recommendations 

By Nishel Fernando 

Petroleum Resources Development Ministry along with the shadow industry regulator, Public Utilities Commission of Sri Lanka (PUCSL), are gearing to implement the third round of liberalisation of Sri Lanka’s lubricant industry, based on a budget proposal.

Addressing the public consultation on the draft regulatory tools related to quality and price of lubricants organized by the PUCSL yesterday, Petroleum Resources Development Ministry Additional Secretary A.H.S.Wijesinghe said, the ministry with the support of PUCSL has setup a project committee and come up with the basic requirement list in order to implement the budget proposal made in 2016. 

He said the recommendation list will be soon be submitted to a Cabinet appointed sub-committee.

Sri Lanka currently has 13 lubricant market players and 22 authorised lubricant brands. 

The large market players such as Chevron Lubricants, which had a 45 percent market share in 2016, had opposed to the further liberalisation, citing  already present leading global lubricant brands in the local market place and the limited capacity of the market to grow further.

However, Wijesinghe said his ministry is planning to issue import licenses to local manufactures that require lubricants and other essential oil in small quantities. 
Govt. moves

He said that these licenses will be issued through a special committee compromising of representatives from the ministry, PUCSL and the Ceylon Petroleum Corporation (CPC).  

In addition, he said the ministry is planning to issue licenses to import lubricants according to recommendations of original engine manufacturers.   

He said that these licenses will be issued through a special committee compromising of representatives from the ministry, PUCSL and the Ceylon Petroleum Corporation (CPC).  

In addition, he said the ministry is planning to issue licenses to import lubricants according to recommendations of original engine manufacturers. 

Germany’s largest lube player eyes Lankan entry 

Speaking to Mirror Business on the sidelines of the event, an official from Liqui Moly, Germany’s largest lubricant manufacturer, said they have been trying to enter the Sri Lankan lubricant market through its local distributor since last year.

Liqui Moly’s Terrotiral Development Manager, Marco Renz however said they are yet to receive a feedback for its licence application despite several attempts to contact the Petroleum Resources Development Ministry.

He pointed out that there has not been a single new license issued during past 12 years despite the notion that Sri Lanka has a fairly liberalised lubricant market. 
Renz emphasized that Liqui Moly is willing to invest in the Sri Lankan market through its local distributor Semini Motors while assuring that there will not be a cash outflow back to Germany.

He also added that Sri Lankan consumers could benefit from the high-standard, high-quality and environmentally-friendly lubricant products that are made in Germany. 

ITI to set up SL’s first lube testing facility  

Sri Lanka’s first testing facility for lubricant products will be established shortly, aiming to tackle adulteration and low quality lubricant flooding the market.
Speaking to Mirror Business, Industrial Technology Institute (ITI) Director General Dr. G.A.S. Premakumara said the laboratory will be operational by end of the third quarter of this year and it will test all lubricant products going into the market including all imported and locally-blended lubricants. 

ITI plans to expand the laboratory to a state-of-the-art petroleum testing facility in future by investing Rs.200-300 million in it. 

Chevron Lubricants Lanka PLC CEO, Kishu Gomes pointed out yesterday that 20 percent of the local lubricant market was dominated by product adulterators, unlicensed importers and re-packers of cheap quality products. Enhance Technologies (Pvt) Ltd., Managing Director, C.V. Ratnayake highlighted that 90 percent of lubricant products used in air conditioning systems in vehicles are fake. 

Moreover, State-owned enterprises such as Sri Lanka Transport Board (SLTB) which consumes approximately 0.7 million liters of lubricants also faces difficulties in identifying quality lubricants from adulterated products in the market due to the absence of a State-recognized laboratory.