Presently, there are over 60 brands of imported lubricants in Nigerian market. The list is long and members of the Lubricant Producers Association of Nigeria, LUPAN, are concerned with the number of imported lubricants allowed into the country, uncontrolled by those who want to grind Nigeria’s economy to a halt, our business correspondent LINUS OOTA writes on the negative impact of these activities on the economy.
It has being revealed that locally produced lubricants are produced in strict compliance with regulatory standards as prescribed by Standard Organisation of Nigeria, SON and Directorate of Petroleum Resources, DPR and in line with international regulators.
Most lubricants imported into the country do not comply with these regulatory standards and some importers actually bring in substandard lubricants. Hence, they sell those products at cheaper prices than genuine products. The high import duty tariff on raw materials is not an incentive to encourage local producers and keep them in business as well as keep employees engaged.
Speaking recently to our correspondent, executive secretary, Lubricant Producers Association of Nigeria, LUPAN, Mr. Emeka Obidike explained that LUPAN is a group in the downstream sector of Nigeria oil and gas industry that engages in the manufacturing of lubricants.
“We have a total number of 41 lubricant plants in Nigeria. Major Oil Marketers Association of Nigeria, MOMAN has its own too. LUPAN is specifically involved in anything that has to do with production of lubricant in Nigeria.
According to him, “LUPAN are the accredited and licensed producers of lubricants used in this country. We are the movers of the Nigerian economy, because all vehicles and all machines including moving vans use lubricants, therefore we are the manufacturers of different kinds of lubricants namely, the liquid, the solid and the semi-liquid etc.
“However, the essence of our association is for us to have a platform to discuss common challenges militating against our business in the oil and gas industry and find solution. The solution is geared towards enhancing the growth and development of the lubricant subsector of the petroleum industry.”
He said in Ghana products anyhow are not imported indiscriminately, “Two of our members before setting up new plants in Ghana wanted to take their lubricants from here, there, but the government of the country says refused. They asked them to come and set up in their country.
“That is what we are expecting from government. They should create an enabling policy where members can be able to thrive. They should make a policy that would protect the local investors, considering that they create jobs for thousands of Nigerians.
“Government may end up killing the lubricant industry if it keeps allowing products from other part of the world to be imported into the country. There is no country that can achieve greatness by overdependence on foreign product.”
The executive secretary further explained that LUPAN has a cordial relationship with Department of Petroleum Resources, DPR and Standard Organisation of Nigeria, SON and “periodically pay visits to the plants of most of our members, but nobody is monitoring the foreign products.
“As I speak to you now there are about 60 products of imported lubricants in the Nigerian market. The regulator is in constant check of all the lubricant plants in Nigeria. On a regularly basis, SON does the close monitoring of our members’ plants. “Unknown to us, they also go into the market and buy the products of our members and test them to be sure they are all up to the standard. The foreign products do not have names on them. Nobody knows who brings them in. It does not have any identification and it cannot be traced to anywhere in the world.
“We are happy that the duty tariff on base oil which have being one of our major challenges over the years has been somehow addressed in the current policy. As I speak with you duty tariff on base oil is a little better.”
Mr. Obidike said that another thing they want government to do is reduce duty tariff on base oil, and other raw materials. “Today, many companies can no longer cope. Many are moribund. Many are battling with high bank interest rate. We 100 percent majorly depend on importation for our major raw materials which is a very big problem and because of this many companies cannot cope.
“We also need standard laboratories in the sector and many other things. Because of this, we need an intervention fund from the government. I have enumerated reasons we need the fund.
“We are not just asking for the fund for nothing sake. We need intervention fund to rescue the sector. We need the intervention fund in order for us to access our raw materials.
“The Federal Government should rescue this sector considering the fact that we generate billions of naira annually for the government. The FG should rescue this sector before it will go moribund like other sectors. ”
Also speaking, the vice chairman of LUPAN, Alhaji Ado Mustapha said that the call for the ban of imported lubricants is a patriotic one geared towards adding value to the nation and at the same time creating jobs.
“Apart from that, we have a lot of idle capacity of lubricant blending plants in Nigeria. Many idle capacities for the blending of lubricants are wasting over the country.
“The repair of these idle capacities would enable LUPAN members supply lubricants that will meet domestic demand and that of the entire ECOWAS countries all put together if the right polices are in place.
“The utilisation of these capacities would make a bold difference in lubricating the wheels of both industrial and economic development in Nigeria, while our graduates who graduated from universities in several thousand on yearly basis will be employed.
“If government can muster the political will and encouragement to ban all these finished goods, we will be in position to blend lubes by engaging our engineers, marketers to do more work. The gesture by government to ban importation of lubes will definitely create more employment opportunities for Nigerians.
The lubricants subsector of the oil industry has the capacity to generate more 5,000 direct jobs if all the idle capacities are utilised. For instance, we need people to blend, engineers in the areas of electrical mechanical, civil engineering; we also require the services of marketers, drivers, salesmen to make the product available to consumers in Nigeria and entire West African sub-region.
“You agree with me that the importation of finished products from lubricants abroad amounts to mortgaging jobs meant for skilled workers in the country to foreigners. We are selling our patrimony in the guise of importation of finished lubricants, which is of low quality when compared with high quality products made in Nigeria. We pay for foreign labour and every other overhead with the unending importation of lube from overseas.
“We are set to support backward integration to move our country forward. If for instance, an investor is interested to invest in Nigeria, he is welcomed, let him come and build a lubricant plant in Nigeria. We are passionate to create jobs for Nigerians.
“We need government to support us in order to be able to fix abandoned blending plants, build new plants as the case may be. This is expected to make LUPAN members add value to the Nigerian economy.