Sri Lanka’s lubricant industry continues to operate without a dedicated regulatory framework, more than a year after formal plans for one were first announced.
The previous administration failed to act on its 2023 commitment, and the current government has yet to clarify its stance—raising alarm within the industry.
Despite repeated appeals from stakeholders for oversight and structure, no concrete action has followed. Industry players have escalated the matter to the relevant authorities.
“Proper legislation and effective implementation would significantly reduce government revenue losses caused by unauthorised operators,” stated Chevron Lubricants Lanka Managing Director/CEO Bertram Paul in the company’s latest annual report.
In the second quarter of 2024, the Cabinet approved the formation of a panel—led by the Power and Energy Ministry Secretary—to draft terms of reference for a petroleum sector regulator to oversee liquefied petroleum gas, fuels, and lubricants.
Following this, the ministry engaged industry participants mid-year to gather input on the proposed framework. A follow-up meeting was held in July 2024.
Paul revealed that the meeting concluded with a proposal to appoint the Public Utilities Commission of Sri Lanka (PUCSL) as an interim regulator. The PUCSL had previously acted as a de facto regulator for lubricants.
Chevron submitted its recommendations as requested. However, Paul noted that no progress has since been made—neither in formalising the regulatory authority nor in appointing the PUCSL to the interim role.
The industry suspects that the delay in implementing reforms is partly due to the looming presidential and parliamentary elections.
Meanwhile, companies continue to pay lubricant licence fees to the Power and Energy Ministry, deviating from the earlier practice of remitting these to the PUCSL. This shift has coincided with the suspension of key support services, including the quarterly lubricant market report, which provided valuable insights on market share and product trends.
The most recent report—covering the third quarter of 2023—was issued 18 months ago.
“This is especially frustrating, as all lubricant operators are still required to submit quarterly sales data, which forms the basis for the licence fees paid to the government,” Paul pointed out.
Compounding industry concerns is the discontinuation of market monitoring efforts previously carried out by the PUCSL and Consumer Affairs Authority. These efforts played a crucial role in controlling product adulteration and the activities of unauthorised players.
Paul warned, “The vacuum created by the absence of a regulator will likely lead to the proliferation of unauthorised operators and substandard products.”
