March 07, 2008 (LBO) – Sri Lanka’s state-run Ceylon Petroleum Corporation (CPC) is looking for a joint venture partner to start a lubricant retailing business, a senior government minister said. Information minister Anura Yapa said the ministry of petroleum has told Sri Lanka’s cabinet of ministers that lubricants would be sold under the brand Ceypetco.
CPC old lubricant blending plant was sold to Caltex (now Chevron) with monopoly protection but the business was later liberalized.
In addition to India’s IOC which has set up a blending plant in the island, about a dozen other firms import and sell lubricants under a licensing system.
Sri Lanka’s CPC is frequently runs losses due to political interference in the pricing of its core fuel retail business and has been looking to enter businesses it has left earlier partly to find profits where political interference is less.
Sri Lanka’s politicians do not believe that inflation is a monetary phenomenon but that it is mostly caused by oil prices.
As a result CPC is frequently forced to run losses to finance fuel subsidies, which have then been covered with tax refunds from the Treasury.
Economic analysts say the resul