The Lubricants Producers Association of Nigeria (LUPAN), which has over 32 companies as members, has warned the Nigerian Federal Government that proactive action must be taken to curb the upsurge of sub-standard finished lubricants and the high tariff imposed on imported base oil into the country.

In a petition to the Minister of Trade and Investment, the association said the high tariff on base oil, which it puts at 10 per cent, is the same as that on imported lubricants, both being housed under the same H.S CODE “2710.1939”..

LUPAN says "this situation puts the lubricant manufacturers at a disadvantage in the sense that after the payment of the 10 per cent tariff, while the importers of finished lubricants sell their products directly to the consumers without extra costs; the licensed blenders through the process of blending incur further expenses adding value to the base oil by introduction of additives and the employment of labour, cost of energy consumed while running their respective blending plants and the high rate of interest accruing from loans from local financial institutions. This in turn raises the cost of the locally blended lubricant thereby making same unattractive to end-users".

Nigeria has since remained a large importer since the fire incident of 1995 at the Kaduna refinery’s base oil plant and since then has been 100 per cent dependent on the import of base oil which constitutes about 90 per cent of finished lubricants.

The association also explained that sub-standard and adulterated finished lubricants from other countries such as Dubai and Turkey have been on the increase, stressing that laboratory analysis report of most of such imported lubes reveal non compliance to specifications and standards both local and international. It described some of the lubricants as outright recycled oil with little or no additives introduced into it.

“These lubricants are imported with undervalued invoicing, deluge the markets and sold at a cheaper rate than the genuine locally produced ones thereby creating unfavourable conditions for the locally produced genuine lubricants, which go through further process of manufacture, consequently selling at a higher cost than their foreign counterpart”, it added.

LUPAN stated that there should be an urgent review of duty tariff on base oil down to five per cent and that base oil should be separated from the current H.S CODE “2710.1939” which houses it along with finished lubricants, and given its own H.S Code and solicits for a higher tariff regime for all imported lubricants to 50 per cent minimal duty in order to protect the local industry.

Presently there are thirty two lubricant plants in Nigeria duly licensed and fully operational while about seven new plants are soon to become operational.