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| President Janaka Ratnayake |
The Chairman of the Public Utilities Commission (PUCSL), Janaka Ratnayake, yesterday charged that the Government plans to remove the levy on lubricants, the key source of revenue, thereby paralyzing the regulatory body.
In a statement, Ratnayake said that the Ministry of Power and Energy has proposed to remove the lubricants levy from the PUCSL, the shadow regulator of the lubricants market without providing proper justification but to parallel the independence of the Commission.
The PUCSL has been regulating the lubricants market since 2006 for 17 years.
“As the PUCSL is funded through a levy to regulate the lubricants market and when the levy is removed, it could result in the regulator not being able to perform its duties effectively and dependent on state funds and political influence . Without a separate fund, the regulator may not be able to carry out its mandate of ensuring a sustainable lubricants industry,” Ratnayake alleged.
“This could lead to several dangers, including the dominance of non-standard and unauthorized (Grey Market) lubricant products in the market, leading to vehicle and manufacturing equipment failures, accidents and other negative outcomes. Lubricant adulteration has become one of the major concerns of the lubricants market and PUCSL has made impressive progress in eradicating these sub-standard and unauthorized lubricant products, paving the way for improved qualified lubricant products that will ultimately benefit consumers,” he said. add the head of PUCSL.
Sri Lanka’s lubricant market volume is approximately 70,000 kl. (53 kl in 2022). There are 26 licensed players in the market with four batters and 22 importers of finished products.
The recent RFP will expand the market to additional players.
Increase in gray market and increase in duty difference between blenders and importers which has a negative impact on importers to compete with blenders are the major problems faced by Sri lubricants market Lanka. It is estimated that 30% of the market is satisfied with adulterated and unauthorized lubricants and an estimated 40% to 45% of the grease market is covered by adulterated greases. The total gray volume of the market is estimated at around 28,000 kl and is increasing exponentially year after year.
“Therefore, removing the regulator’s levy on the lubricants market could have serious negative consequences, potentially putting the safety and well-being of consumers at risk. It is important to ensure that regulators have the necessary funding and resources to carry out their duties functions effectively and ensure that the products are safe and reliable,” Ratnayake warned.
“Paralyzing independent regulatory bodies like PUCSL for mere political gains would create serious harm not only to the current market but also to the future market and will send a wrong message to the international community about clipping the wings of an independent utility. I therefore condemn this move,” the president said.
According to him, contributing to the industry for the past few years, PUCSL was able to issue a bulletin on adulteration and illegal imports under the Consumer Authority (CAA) Act to deal with the absence of legal provisions to attack or arrest product adulterants and illegal importers. within the petroleum law.
PUCSL is also in the process of drafting an implementation MOU to provide necessary facilities to facilitate raids on CAA and also bear the cost of disposal of seized lubricants and greases to encourage raids on the adulterated market. PUCSL has also taken steps to offer the NVQ 03 qualification for 6,000 lubricant technicians to produce technically qualified personnel in the lubricants market in order to raise the technical and safety standards of the industry while plans are being developed to establish a facility · testing of lubricant products.
PUCSL is also currently studying to determine the duty differential and local value addition to advise the government on the optimal duty structure and has already implemented a procedure for handling consumer complaints and resolving disputes between consumers and stakeholders market
