Lube Moves

May 10, 2014 (LBO) - Malaysia's Hyrax Oil Sdn. Bhd, will set up a lubricant blending plant in Sri Lanka partnering with state-run Ceylon Petroleum Corporation, which owns the largest fuel distribution network in the country. The joint venture plant with an investment of 9 million US dollars will cater to the local and international markets, the state information office said.

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Sri Lanka had a state monopoly in lubricants for several decades until the plant was privatized in the mid 1990s with the monopoly intact.

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But the market was later opened up expanding the economic freedoms of citizens, but there is still a tax difference between domestic blending and imported finished products.

Blending plants in the country are now run by Chevron Lubricants with Indian Oil Corporation's unit in the island bringing in competition along with Sri Lanka based Laugfs group.

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Chevron's sales had been under pressure in the current weakened economic conditions.

CPC has an extensive network covering about two thirds of fuel distributors in the island which makes it easier to sell.