Manufacturers frown at base oil importation

                                                                 

By Charles Nwaoguji

Local manufacturers of base oil in Nigeria have expressed worries over the indiscriminate issuance of licenses by NAFDAC to anyone willing to pay.

According to the Executive Secretary of Lubricant Producers Association of Nigeria (LUPAN), Emeka Obidike noted these licenses are issued not minding if such person (s) are having the facilities to store nor blend.

Obidike, who spoke to the Daily Sun, recently,  noted that over time the Association has received complaints of its members being tasked with the payment of dues by the National Agency for Food, Drugs Administration and Control (NAFDAC) on pain of having their consignments confiscated.

He stated that should this blatant usurpation of the powers of the Department of Petroleum Resources be left to fester, a situation would arise wherein every agency of the government will unilaterally confer upon themselves the authority to license the importation of base oil, which would result in increased cost of production and glutting of the market with excess product.

“This would inevitably find its way into the hands of unscrupulous elements who fake, counterfeit and blend below standards to minimize costs, thereby worsening the already crippled market situations for the genuine locally manufactured products and will consequently snowball into decreased investment flow into the industry, overdependence on imported finished lubes, decreased capacity utilization, dereliction of infrastructure and mass unemployment, and finally sound the death knell for many local industries and the sector as a whole,” he added.

He stated that the local lubricant market is currently reeling from the effect of the rampant and wholesale importation of base oil resulting.

He said that if the seizure of their consignments continued, the indigenous blenders may be forced to shut down their plants which lead to the risk of losing their businesses, corrosion of their goodwill and professional integrity, asphyxiating demurrages and transactions and defaulting in the repayment of facilities.

He stated that the local lubricant market is currently reeling from the effect of the rampant and wholesale importation of base oil resulting.

He stated that the  operators in the lubricant sector are already beleaguered by a myriad of stifling levies and duties from other government agencies such as the Standards Organization of Nigeria, the Nigeria Navy, NIMASA, Nigeria Customs Services, adding that inaccessibility of Forex for the purchase of base oil and additives, both being 100% dependent on importation; exploitative and fluctuating exchange rates and oppressive bank interest rates on loans- as operators have had to personally source funds for their business through banks.

“We appealed the Federal Government to order the coordinating Ministries of both the Department of Petroleum Resources and the National Agency for Food, Drug Administration and Control, with a view to delineating the jurisdiction of both agencies’ with respect to licensing of base oil importation in Nigeria, as we on our part, affirm our commitment to supporting its economic agenda within our capabilities as manufacturers and patriotic citizens of Nigeria,” he said.