Aug 24, 2016 (LBO) –Sri Lanka’s cabinet has approved appointment of the Public Utilities Commission as the regulator of the lubricant industry and bitumen trade so as to increase competition in the industry in line with the 2016 budget proposals.
At present 13 companies including Ceylon Petroleum Corporation and Lanka Indian Oil Company are engaged in the lubricant industry, while bitumen trade is basically operating by CPC and LIOC.
The government says Sri Lanka is yet to gain the full benefits of the lubricant industry due to issues such as non-issuance of new licenses, not amending the registration and license fees since 2006, and non establishment of an independent regulator.
With the cabinet decision, the Petroleum Ministry will issue new licenses for potential new entrants in the lubricant industry and will increase existing fixed and maximum registration fees for lubricant and bitumen trade.
Sri Lanka Standards Institute will issue national standards conformity certificate to lubricant players approved by the regulator while establishing national standards for bitumen.
Consumer Affairs Authority is to remove all substandard and unauthorized lubricant brands from Sri Lanka.
Sri Lanka Customs and Import Export Control will also regulate the importation of lubricants while listing bitumen as a licensed item under law.
However, Chevron Lubricants Lanka, a leader in the island’s lubricant industry earlier said the market may be at risk of further fragmentation as the government proposed to open up the lubricant market.
The company said the market may be at risk with 13 players and possibly more competing for a share of the 54mn litre market in a backdrop of sluggish industry growth.