COUNTRY
FEATURE
Agencies step to
save Nigeria’s lubes
industry from drowning
counterfeits
People selling unbranded lubricants in bottles in Nigeria
N
By Olaolu Olusina – Lagos
igeria loses more than $3 billion
annually to counterfeited
lubricants despite spirited
efforts by authorities in the
West African country to contain the problem.
This is according to a paper presented by LUPAN
Chief Executive Officer Emeka Obidike during
the Argus lubricants conference that was held
in South Africa in July, which also said problem
had become a major challenge for lubricants
producers in Nigeria.
In his presentation, Mr. Obidike expressed
concern that on account of the rampant
malpractice a considerable number of lubricants
producers had resorted to undercutting each
other, indiscriminately selling their base oils to
unauthorized dealers in a bid to sell off their
products and make profits, with the sole aim of
just avoiding production costs.
‘Counterfeiting practices such as imitation
of color, name or illegal packaging of preferred
brands; packaging plain unblended base oil
and selling it as blended lubricant blending
below set importation of low quality base oil;
outright sale of base oil in plastic bottles that
are unlabeled and unpackaged; blending in
drums instead of plants and importation of
substandard finished products is common the
country’, he said.
‘To many of these traders, the practice is a
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smart way of avoiding high production costs and
the attendant taxes and levies by government
regulatory agencies, difficulty in securing
licenses and permits as well as unfavorable
policies, indiscriminate issuance of permits by
agencies and high cost of importation of raw
materials such as base oil and additives’, he said.
With a combined total installed capacity of
existing blending plants, if operating at full
capacity, estimated at over 600,000 metric tones
per annum, the current total blending capacity
is just about 350,000 metric tonnes per annum.
Mr. Obidike said most African countries blend
60 percent of their base oil while the rest goes
into the market unblended.
He said the substandard products are
usually sold for less, creating unfavorable
market situation for genuine products. He
noted that breakdown of machinery, closure of
existing plants, increase in unemployment rate,
increasing cases of accidents and environmental
pollution were some of the consequences of
fake oils circulating in the market.
The government agencies tasked with
ensuring compliance to standards include
Department of Petroleum Resources
(DPR), which is the statutory body with the
responsibility of granting licenses to blenders
and import of petroleum products in Nigeria,
including base oil.
Others include the Standards Organization
of Nigeria (SON), which is responsible for
the enforcement of standards and products
specification; and the Petroleum Products
Pricing Regulatory Agency (PPPRA), which
is responsible for price control of petroleum
product in Nigeria.
According to Mr. Obidike, between 2010
and 2011, stakeholders in the lubricants sector
in Nigeria made several efforts to sanitize the
industry, including placing series of adverts in
various national newspapers to enlighten the
public of the dangers of tolerating substandard
lubricants.
“Between 2003 and 2004, the Standards
Organization of Nigeria and the Department
of Petroleum Resources sought intervention of
stakeholders to sanitize the industry and some
level of success was recorded, but sustainability
remains a snag for such initiatives,” he said.
“On individual levels, the DPR has on
occasions embarked on market sanitization,
by inviting companies to make presentations of
their operating license, product branding and
packaging, evidence of quality control amongst
other requirements. On the other hand, the
SON also commenced monitoring at seaports,
airports, taking samples from vessels, paying
visits to plants and taking samples for testing,
as well as random sampling and testing on the
open market,” he said.
continued on pg 14
September 2015 • | Lubezine Magazine