The Nigerian lubricant market is embroiled in a heated controversy between the Federal Government and local manufacturers. The bone of contention is the issuance of import permits for lubricants, a move intended to address the significant 60% shortfall in domestic supply. While the government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), argues that the policy is necessary to bridge the supply gap and ensure quality control, local manufacturers under the Lubricants Producers Association of Nigeria (LUPAN) vehemently oppose it, claiming it threatens their survival and promotes the influx of subpar products.
The NMDPRA introduced a new digital Lubricant Importation Module, integrated with the Nigeria Customs platform, aiming to streamline the importation process and ensure transparency. They justify the policy by highlighting the need to meet the current demand while simultaneously encouraging local production. The authority believes that by regulating imports, they can create a more stable market, which in turn will incentivize investment in local production. They also emphasize their commitment to curbing the circulation of adulterated lubricants, which they see as detrimental to both vehicle engines and the economy.
LUPAN, however, views the policy as a direct assault on local manufacturers. They contend that issuing import permits to companies without blending plants undermines their investments and facilitates the influx of cheap, often recycled and adulterated, lubricants. This, they argue, is leading to factory closures, job losses, and significant financial burdens on their members, some of whom claim to have lost billions of Naira. LUPAN insists that the focus should be on supporting existing local capacity, which they believe is more than sufficient to meet national demand and even support export potential. They argue that the current policy contradicts the government’s industrialization agenda and favors importers at the expense of local producers.
The crux of the disagreement lies in the differing approaches to addressing the supply deficit. The NMDPRA favors a two-pronged approach: regulating imports to meet current demand and incentivizing local production for future self-sufficiency. LUPAN, on the other hand, prioritizes bolstering existing local production capacity, arguing that the current policy incentivizes importation and undermines local industry. They demand that import permits be restricted to registered blenders with functional plants, emphasizing that uncontrolled imports are crippling the domestic market. They believe the solution lies in enforcing stricter quality control on imported products and providing more support for local manufacturers to expand their operations.
The situation is further complicated by accusations of conflicting government policies. While the NMDPRA promotes importation to address the supply gap, LUPAN asserts that this contradicts the Federal Ministry of Industry, Trade, and Investment’s lubricant policy, which focuses on promoting local production. LUPAN views the NMDPRA’s actions as contrary to the government’s stated “Renewed Hope” agenda, which emphasizes industrialization and job creation. They feel betrayed by regulatory agencies that they believe should be supporting, not hindering, the growth of the local lubricant industry.
The Nigeria Customs Service, a key player in the implementation of this policy, has publicly pledged its support to the government’s objectives. They emphasize their commitment to ensuring seamless processing of goods while preventing the entry of unapproved products. However, their involvement raises further questions regarding the enforcement of quality control measures and the potential for corruption or undue influence in the issuance of import permits. The alignment of Customs with the NMDPRA highlights the complex interagency dynamics at play and the significant power these agencies wield in shaping the future of the Nigerian lubricant market.
This conflict underscores a broader tension within Nigeria’s industrial policy: the balancing act between achieving self-sufficiency and meeting immediate market needs. While the NMDPRA prioritizes addressing the current supply deficit, LUPAN stresses the importance of protecting and developing the local industry for long-term economic growth. This standoff highlights the critical need for a comprehensive and coordinated approach to industrial development that addresses both short-term demands and long-term sustainability. The ongoing dispute necessitates a dialogue between all stakeholders to find a solution that supports both the immediate needs of the market and the long-term health of the Nigerian lubricant industry. The future of this vital sector hinges on the government’s ability to reconcile these conflicting priorities and implement policies that foster sustainable growth and protect local investment.
