From Adanna Nnamani, Abuja
The Federal Government has introduced stricter regulations on lubricant importation in a bid to curb the influx of substandard products and protect local manufacturers, who say they have lost over N10 billion due to the rising presence of recycled and fake oils in the Nigerian market.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), on Wednesday, launched a digital platform called the Lubricant Importation Permit Platform (LOPP), aimed at streamlining approval processes, ensuring quality compliance, and monitoring all lubricant imports into the country.
Speaking at a stakeholder workshop held in Abuja, the Chief Executive of NMDPRA, Engr. Farouk Ahmed, said the initiative was designed in collaboration with the Central Bank of Nigeria (CBN), the Nigeria Customs Service and other agencies.
“This digital platform is integrated with a custom services platform ensuring seamless import clearance, real-time data tracking and improved compliance enforcement.
“Let me be clear, initiative is not designed for strict trade, rather it is meant to strengthen our industry, to ensure only high-quality products circulate in the market and align with President Bola Tinubu’s industrialization agenda to reduce over-reliance on imports and promote local capacity,” he said.
Ahmed, who was represented by Engr. Francis Ogare, explained that the initiative aligns with the provisions of the Petroleum Industry Act (PIA), which mandates the agency to ensure that all petroleum products, including lubricants, meet strict quality and safety standards.
“Poor quality lubricants do more than damage engines, they damage the truss. They damage and harm our productivity and create unnecessary economic waste,” he stated.
But local producers under the Lubricant Producers Association of Nigeria (LUPAN) raised concern that the continued issuance of permits for finished lubricants is pushing indigenous companies out of business.
Delivering a good will message, Chairman of AMMASCO Group, Alhaji Mustapha Muhammad, warned that most of the imported lubricants in the country are recycled and substandard, blaming them for rising losses and declining production capacity in the sector.
“Most of the products that are imported to the Nigerian market today are substandard. They are recycled oils. They use recycled oil in Dubai, which everyone knows is the center of the transshipment of load from Europe to Asian countries to African countries. They have a lot of recycled oil which they bring from the ships, oil they are supposed to discard and destroy, but they now sell it at a cheap price to those who buy recycled oil and export it to Nigeria and African markets. Those are the oils that usually lock our cars and trucks because of the cheap price they are selling at,” he said.
According to him, “Many of our members have lost from N10 billion, N8 billion, N6 billion, N2 billion capacity. I mean the Naira they lost.
Muhammad noted that local producers are currently operating at 30 to 40 per cent capacity and risk shutting down further if not protected. “Most of our members today are working from 7 o’clock in the morning to 5 o’clock in the evening. If we have the capacity that we can work three shifts in the day, I’m sure it will expand to 70 percent of our capacity,” he said.
He also alleged that importers are disguising their shipments to bypass regulations. “They label it as secure part. They put some in the secure part and they declare it as the secure part. But when they brought the containers out we discovered that it was engine oil inside,” he said.
Also speaking, Executive Secretary of
LUPAN, Emeka Obidike, stated that the current policy threatens to collapse Nigeria’s lubricant industry.
“The policy will sound a death to the entire existing plants in the country who are currently producers below 30% of installed capacities. It will kill the growth recorded in the last few years in the sector, and set back the lubricant policy of the Federal Government, which is currently being perfected by the federal ministry of Industry Trade and Investment,” he said.
“There will be an increase in breakdown to machineries all over the country, as a result of low quality Lubricant imported into the country, with recycled oils without additives. The new policy will ultimately create serious compromise, similar to what the sector is experiencing in the indiscriminate granting of basic oil import permit licence to none plants,” he added.
Obidike warned that over 200,000 jobs could be affected. “Many companies might slip into bankruptcy and insolvency because of the huge loss. Every country protects the key business that they have due advantage. Same is expected from your esteemed agency rather than to kill the same,” he said.
Representing the Nigeria Customs Service, Assistant Comptroller Umar Aliyu, expressed support for the regulatory reforms.
He said: “We are very happy to be here because one of the mandates of the Nigerian Customs Service is to implement government fiscal policies. Also, we are at the forefront when it comes to customs clearance.
“It is part of the permit that all the stakeholders that are involved in this industry can look at. And the sensitization that is going on now within the stakeholders is one of the key aspects. Because the mantra of this government is what? Renewable. Well, this is the right way to get it right.” he added.