Chevron Lanka Criticizes Government

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The CEO of Chevron Lubricants Lanka recently criticized the government’s management of the lube industry, questioning the logic of allowing more suppliers into the market and complaining that legislators have done too little to combat counterfeiters.

In the company’s annual report for 2021, published in late April, Managing Director and CEO Muhammad Najam Shamsuddin pointedly raised an eyebrow at the Petroleum Ministry’s granting last year of licenses to nine new finished lube marketing companies.

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As Shamsuddin noted, that brought the number of licensed suppliers to 22. Companies are not permitted to produce or sell lubricants in Sri Lanka unless they hold a license to do so.

“Nine new players were allowed to enter the lubricants industry,” Shamsuddin said. “This is a rather unusual move as the market has been in a flat to declining trend over the previous four years.”

Chevron is the largest player in the market, claiming to supply approximately 40% of demand. Chevron and other previous license holders complained previously during the protracted period over which the government decided to issue more licenses. Government officials said they took that step in order to benefit end users by increasing competition among suppliers.

The Daily Mirror, a news organization based in Sri Lanka, reported that the companies receiving the new licenses included Prista Oil Holding, of Bulgaria; and Petronas Lubricants, of Malaysia; United Arab Emirates-based joint venture GP Global Mag; South Korea-based GS Caltex; Lukoil Marine Lubricants, of Russia; Total Oil India, of France; Idemitsu Lube, of Japan; and Germany’s Liqui Moly.

Shamsuddin criticized the government for not following through on a commitment to combat the sale of counterfeit and substandard lubricants – a problem the government has described as rampant. He said companies “are still awaiting concrete steps by the regulator to mitigate these threats to the overall industry. The enactment of the required legislative framework empowering the regulator to operate effectively is yet to take place.

“Also, while the Ministry of Energy has taken certain initial steps to set up an independent laboratory through the Industrial Technology Institute to test the conformity of lubricants to standards, it is yet to be operationalized to meet the market’s needs.”

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