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Chevron warns of grey market

The grey market in the Sri Lankan lubricants industry is growing rapidly and it will impact badly on the industry Managing Director of Chevron Lubricants Lanka Kishu Gomes said yesterday.


Chevron MD CEO Kishu Gomes at the press conference. Picure by Saliya Rupasinghe

He said if regulators could not pay enough attention on the lubricant grey market, within five years time it will have a major impact on the country’s transport system and the economy. “The grey market in the lubricant industry is a common issue in the region. There is a 20 per cent growth in the Bangladesh grey market,” Gomes said.

“There should be a correct regulatory framework to combat and control the grey market in the industry. However, all the players in the industry should work together to overcome this issue,” he said.

“As a company, we have made a significant investment on combating the grey market in the industry. We have deployed private investigators to find facts on the grey market and we were able to track some of the illegal operators,” he said. “There is a price difference in the branded products and these lubricants. Some illegal operators sell used oils, which are disposed from service stations after doing some changes to the oil. There are incidents that have been reported where fake operators are using packages of legal operators to sell their products.

“It is difficult for the consumers to identify quality lubricants and these fake products,” he said.

However there is a 9 per cent negative growth in the local lubricant market. Last year, the size of the local lubricant market was 47 million liters. Gomes said the high inflation rate, decline in the vehicle population in the country and high fuel charges have resulted in the negative market growth.

“We have noticed a rapid growth in the export markets in Bangladesh and Maldives. In Bangladesh there was a 20 per cent market growth and 30 per cent market growth in the Maldives.

The company which has a blending plant in Sri Lanka expects to invest more on technical advancement and on improving the product range.

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