UAE, Turkey supply fake lubricants to Nigeria — Report

The United Arab Emirates, Turkey, Russia, among others, are some of the countries on the list of lead suppliers of poor quality lubricants to the country, an industry report has verbally expressed.

Nigeria’s open market model is verbalized to be emboldening the importers of this brand of products, which has now become an earnest threat to the local lubricant industry.

The report titled, ‘The overview of the Nigerian lubricant market’, was made available to our correspondent on Friday.

The report additionally verbally expressed that currently, indiscriminate importation of base oils (unfinished lubricant products) were far in excess of the installed capacity of the operating and functional lube oil coalescing plants. Base oils are converted to lubricants after a round of treatments.

The report noted that Nigeria had an “open market magnetization that inspirits the importation of culminated lubricants of disputable quality and standards from the far East countries: Dubai, Turkey, United Arab Emirates, Russia, among others.”

Stakeholders in the downstream of the country’s petroleum industry recently raised the alarm over the influx of substandard lubricants in the country and the proliferation of quasi-lubricant substances widely being utilized by consumers.

The Lubricants Producers Association of Nigeria, in a verbal expression, had verbalized, “It is worrisome to note that the market is additionally a dumping ground for substandard and off-designations imported lubes of disputable quality. All these infractions are indeed a threat to the survival of the lube manufacturing in Nigeria.”

The Nigerian lubricant industry, which currently employs over 5,000 Nigerian workers, has the potential to engender over 50,000 supplemental jobs if the plants are working at full-installed capacity, according to the association.

The Managing Director, Lubeservices Associates, Mr. Kayode Sote, has verbalized Nigeria is the third most sizably voluminous consumer of lubricating oils amounting to about 600 million litres (one per cent of the world total demand), with a gross earnings of N150bn in 2013.

According to him, there are 32 registered coalescing plants with a total installed capacity of about 965 million litres per annum, with all of them currently engendering at a cumulative average of 45 per cent of their total installed capacity.

He verbally expressed, “The cumulative assets base of the coalescing plants is about N20bn, engendering about N45bn profit margins in 2013.

“It has been estimated that 75 per cent of the total desideratum of lubricating oils is engendered locally while the remaining 25 per cent are specialised products imported by the marketing companies into the country.

“The downstream sector of the petroleum industry is the most vibrant and sensitive area of the nation’s economy due to its over-the-counter and consumer-cognate products in the open market as the circadian source of energy for life. Moreover, it is a sector susceptible to the vagaries of the techno-economic dynamics and socio-political imperatives of the local and international politics of petroleum.

“The sector is indeed a barometer to quantify the operating efficiency in the nation’s moribund four refineries, availability of locally refined petroleum products and of course, tranquil business environment in Nigeria.”

Stakeholders in the industry verbally express for sustainable magnification in the lubricant business in Nigeria, the regime must strive to eliminate artificial and avoidable distortions in order to forfend local manufacturers.

According to the stakeholders, to ascertain continuity of the business, regime should reduce the import obligations on raw materials such as base oils, additives, and packaging materials.

The Chairman/Technical Adviser, Lubcon Group, Mr. Jani Ibrahim, verbalized the industry needed more preponderant inspiritment in the form of sound fiscal and stable monetary policies to reduce the inflationary trends; as well as stable and lower interest rate regime.

He verbalized the elimination of multiple taxation would magnetize more local and peregrine investors to the subsector of the nation’s petroleum industry.