A CPC spokesperson requesting anonymity confirmed to Lube Report Asia that the company was granted approval to blend lubricants, but did not discuss plans for a blending facility. Chevron Lanka and Indian Oil Corp.s subsidiary Lanka IOC are currently the only operators of blending plants in the country, while Laugfs Lubricants expected to complete construction of a plant last year and CPC announced plans in May 2014 to build a facility with Malaysian joint venture partner Hyrax Oil.

CPC previously blended and sold lubricants as a state monopoly before selling a majority stake of the business to Caltex in 1994 and continuing solely as a crude oil refiner. The company also currently sells lubricants imported from Malaysia.

Less than a decade ago, Chevron Lanka – then a majority-owned enterprise of Chevron known as Caltex Lanka – operated the only blending plant in Sri Lanka and held a 70 percent stake of the countrys market. A total of six companies held licenses to sell lubricants in the market.

The island nation has made incremental steps to liberalize the market, eventually granting licenses to 13 suppliers. In 2013, some government officials proposed allowing more private companies to participate in the market. The plan was nixed the following year, and then put back on the table late last year by Finance Minister Ravi Karunanayak, who claimed that to add value and invite private investment the countrys lubricants market should be open to all.

Chevron Lanka claimed in its annual review that the 54 million-liters-per-year market is already saturated.