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Sri Lanka invites new players to participate in domestic lubricants industry

BP and IEnova have announced the execution of a long-term contract for 50% of the initial capacity of a marine terminal to receive, store, and deliver refined hydrocarbons, which IEnova will build within La Jovita Energy Center, located 23 km north of Ensenada, Baja California, Mexico.

Sri Lanka is inviting more players to import, export and blend lubricants in a new licensing round.

Currently, there are 13 lubricant companies in Sri Lanka, including one domestic brand, Laugfs, selling 22 brands of lubricants. Annual lubricant demand is estimated at 64,485 kilolitres and valued at LKR 26.5 billion (USD 163.7 million) in 2017.

“With the view of creating healthy competition for quality lubricants, the GOSL has decided to invite Requests for Qualification (RFQ),” Sri Lanka’s Petroleum Ministry said.

Sri Lanka does not yet have an independent regulator for lubricants. The Public Utilities Commission is currently the shadow regulator for Sri Lanka’s lubricants industry.

Proposals have been called to set up blending plants or to import and sell lubricants, greases, marine lubricants and transmission oils.

Companies interested in blending or producing lubricants and lubricating greases in Sri Lanka must have at least five years’ experience in the lubricants business and must be able to prove its capacity to invest a minimum of USD 5 million. The lubricant blending plant should have a minimum capacity of 7,500 metric tonnes; for lubricating grease, the minimum capacity is 1,000 metric tonnes.

A blending plant has to be built on a tentative approval basis. Final approval will be given only after the government is satisfied with the technical specifications of the plant.

In order to trade, distribute or sell automotive and marine lubricants and greases, a company must own or have an agency for a brand name, have at least five years’ experience in the industry and must have the capacity to invest USD 1 million.

To trade, distribute or sell genuine transmission oil recommended by an original equipment manufacturer, a company must be the sole accredited agent and must have five years’ experience.