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
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.