Lubezine Magazine Vol. 9 April - June 2014 | Page 30

LAST

WORD
MARKET REFORMS

LUPAN leads vanguard to
reform Nigeria’s lube market
By Olaolu Olusina, Lagos

W

orried by the influx of substandard
and adulterated lubricants streaming into the Nigerian market, the
Lubricants Producers Association of Nigeria
(LUPAN) is in the vanguard to sanitise the
market.
LUPAN, currently made up of 24 indigenous
lube companies, is working in concert with the
Major Oil Marketers Association of Nigeria
(MOMAN), also known as the ‘Big 8’, to achieve
this goal. Ten other new lube plants are also
expected to join LUPAN soon.
‘LUPAN is a pressure group working with
other stakeholders such as the Standards
Organisation of Nigeria (SON), Directorate of
Petroleum Resources (DPR) of the Nigerian
National Petroleum Corporation (NNPC) and
the Consumer Protection Council (CPC)’,
LUPAN Executive Secretary, Emeka Obidike
(pictured), told Lubezine in Lagos, Nigeria’s
commercial capital.
‘We also have a good working relationship
with the MOMAN, made up of the oil majors,
in an effort to sanitise the industry. We have
been discussing the major challenges facing
the industry with the government and we are
happy to report that the government is now
listening to us,” he added.
With an investment of over N680 billion in
an industry employing about 300,000 workers,
the indigenous lube manufacturers have the
capacity to produce about 960 metric tonnes
per year but are currently producing 582
metric tonnes annually in a market considered
as the largest in West Africa.
Moreover, because of the importance of
the lube industry to the Nigerian economy,
the association is currently working with the
Nigerian Government and other stakeholders
to fashion a policy framework for the lube subsector development in the country.
On his part, Obidike said the proposed
policy framework tagged, Backward Integration Policy (BIP) for the lubricant sub-sector
and drafted last October, is currently being
considered by the government.
He also listed the influx of fake lubes into the

28

country as a major concern for LUPAN; high
tariff on base oil which stands at 10 per cent
as well as internal adulteration of products
belonging to LUPAN members. All of these,
Obidike disclosed, are encapsulated in the
proposed mitigation policy document.
‘In the document, we raised three issues that
are germane to the survival of the industry.
‘These include the influx of fake lubes into
the country. Nigeria has become a dumping
ground for all sorts of lubes, especially from
the Middle East. We have identified over 60
brands of fake lubes in the market and we are
worried by this development that is killing the
local industry.
‘We are also bothered at the high tariff on
base oil that stands at 10 per cent. We are calling for a reduction of tariff on base oil that is
the raw materials for lubes to five per cent and
an increase in duties for imported lubricants to
25 per cent to protect local producers. We also
want the importation of base oil restricted to
only registered lubricants producers.
‘ A situation where importers of finished
lubricants pay the same 10 per cent duty as we
pay on base oil is not healthy as it can put us out

of business and put all our investments at risk,
throwing thousands of Nigerians out of jobs.
”In 2014, we plan to take our campaign to
the Parliamentary Committee on Trade and
believe that they will consider our case,” the
LUPAN Executive Secretary explained.
He added that LUPAN is also worried
about the internal adulteration of products
belonging its members, saying a Task Force
had already been set in place to address this,
including measures to tackle the menace
already being perpetrated.
Observers of the development are unanimous in their belief that LUPAN has made
an ambitious move with the proposed policy
framework, which sets 2015 as target, seeking
to stimulate growth in the lubricant sub sector
by enhancing value addition and self-addition
in the country.
The proposed policy, a copy of which was
obtained by Lubezine in Lagos, “is aimed at
taking advantage of the availability of bituminous tar sand deposit in the country, which
can yield heavy crude oil for the production
of base oil, which is the main raw material for
lubricant production.”
It also seeks to achieve, among other objectives, the establishment of functional heavy
crude oil refineries dedicated for base oil
production in the country; increase capacity
uti