DECEMBER 27, 2016 – The lubricant industry is being threatened following the bickering between the Department of Petroleum Resources, DPR, and the National Agency for Food and Drug Administration Control, NAFDAC, over the licensing of base oil importation.
While DPR insists the licensing falls within its purview, NAFDAC has also continued to claim that lubricant importers must have NAFDAC license. Consequently, importers of the product appear to be in a dilemma over which government agency to apply for license, as they complain of having their consignments confiscated on most occasions, by NAFDAC, despite being shown a genuine DPR license.
Speaking on the issue, Emeka Obidike, Executive Secretary, Lubricant Producers Association of Nigeria, LUPAN, said that the Association has intervened on behalf of its members, all to no avail.
He said, “Severally we have written on behalf of our members protesting this state of affairs and categorically stating the following:
“That our members being blenders, are duly licensed by the Department of Petroleum Resources to import, store and blend base oil in Nigeria, for their blending requirements.
“That the base oil so imported is a mineral based, crude oil derivative and is classified as petroleum oil and oils obtained from bituminous minerals, in the National List of the ECOWAS Common External Tariff and Fiscal Policy Measures for 2015, and is not obtained from chemical synthesis [synthetic oil].
“By the Petroleum Act, the Department of Petroleum Resources is the primary regulator of the petroleum sector and its sub sector and that the continued refusal of NAFDAC to acknowledge this fact could be construed as a blatant disregard and encroachment on the authority and jurisdiction of the DPR.”
Obidike explained that indigenous blenders are constantly being threatened with the shutting down of their plants and seizure of their consignments and are persistently being faced with the risk of losing their businesses, corrosion of their goodwill and professional integrity, asphyxiating demurrages and transactions and defaulting in the repayment of facilities.
According to him, 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 Service, as well as other oppressive and debilitating factors, to wit, inaccessibility of FOREX for the purchase of base oil and additives, both being 100 percent 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.
“The lubricant sector has been lamentably bereft of intervention funds and schemes to alleviate the financial burden of operators, high tariff on additives and crippling policies for the sector, to mention but a few, the cost of which when incorporated in to the price of finished products makes them more costly and consequently less attractive to consumers.
“The local lubricant market is currently reeling from the effect of the rampant and wholesale importation of base oil resulting from the indiscriminate issuance of licenses by NAFDAC to anyone that can afford and is willing to pay their dues, not minding that they neither have the facilities to store nor blend same,” he added.