Betting Big

Feb. 15 (LBO) – Smaller lubricant players are asking the Sri Lankan government to scrap a five-year license fee and instead opt for a 0.5 percent tax on each firm’s turnover, an industry official said Wednesday.

Last month, Sri Lanka doubled licence fees for lubricant operators fixing it at Rs. 10 million (US$ 100,000) for five-years or an annual fee of Rs. 2 million.

Smaller lubricant players are against the decision and are lobbying high level government officials to scrap plans.

After several rounds of negotiations, the government asked us to pay a Rs. 500,000 licence fee from January till March, until we resolve this issue, Trevor Reckerman, Joint Managing Director Exxon Mobil told reporters.

The local lube market, estimated at about Rs. 6 billion (US$ 60 million), is dominated by ChevronTexaco whose local operation is called Caltex Lanka Lubricants Ltd.

The balance is split between Lanka Indian Oil Corp. (LIOC), Exxon Mobil/Esso, Valvoline, Shell, and British Petroleum/Castrol.

Caltex controls around 80 percent, with LIOC about 13 percent, according to industry estimates.

Having bought a part of the then state-owned lubricant sales business, Caltex’s 10-year mon