The Sri Lankan Government is proposing that lubricants be removed from the country's "negative list" of items that can be imported, ending the practice of forcing companies to get 'permission' from near monopoly lubricant sector players, before importing such.

Companies had to wait for long periods of time and go through administrative hassles to import special lubricant brands demanded by ship owners who bring vessels to be repaired and serviced in Colombo.

"Presently the lubricant market is managed only by a few companies," Finance Minister Ravi Karunanayake said in a budget for 2016. "Hence I propose to liberalize the lubricant market and I encourage the companies to venture into more value added products with high investment. "Further I propose to remove lubricants from BOI (Board of Investment) negative list."

The lubricant market is regulated and governed under the provisions of the Petroleum Products (Special Provisions) Act No. 33 of 2002 and the Ceylon Petroleum Corporation Act No. 28 of 1961. The importation, exportation, blending, production, sale, supply and distribution of lubricants, including greases, require specific authorization from the Government of Sri Lanka, which issues licenses for the blending and sale of lubricants.

The Government has appointed the Public Utilities Commission of Sri Lanka (PUCSL) as the shadow regulator for the lubricants market. As the shadow regulator, the PUCSL advises the Ministry of Petroleum Industries on policy and regulatory matters with respect to liberalization of the lubricants industry. When the lubricant market was further liberalized in 2006, PUCSL assisted and advised the Ministry of Petroleum Industries in formulating the policy framework and market entry criteria to ensure that only quality lubricants meeting internationally accepted standards are allowed into the market.

As of the end of last year, only 13 companies, including BP, ExxonMobil, Chevron, Total, Shell, along with regional and local companies such as Lanka IOC, Laughs and Ceylon Petroleum Corporation, were authorized to import, export, sell, supply and distribute lubricants in Sri Lanka.

Three companies blend lubricants in Sri Lanka—Chevron, Lanka IOC (a subsidiary of Indian Oil Corp) and Ceylon Petroleum Corporation.

Ceylon Petroleum Corporation once had a state monopoly in lubricants for several decades until the plant was privatized in the mid 1990s when it was sold to Caltex. The market was later opened up, but there is still a tax difference between domestic blending and imported finished products.

Though Sri Lanka obtained self-determination from British rule in 1948, a number of freedoms of poor citizens and even large investors were subsequently taken away through import duties to 'protect' domestic industries and licensing.