‘Curbing import of substandard lubricants will spur downstream sector growth’

Industry players in the Nigerian downstream sector of the oil and gas industry are optimistic that curbing the importation of substandard lubricants into the Nigerian market will support the industry to grow.

They maintain that with the right government incentive and an enabling environment, there is great opportunity for further downstream investment in manufacturing of products to create employment opportunities for Nigeria.

Dikanna Okafor, executive director, corporate services, Chicason Group, says the major challenge faced in the downstream sector is the substandard lubricants products from other parts of the world into Nigerian market.

Okafor observes that government cannot advocate for local market to develop it capacity, encourage made in Nigerian goods while on the other hand allow substandard goods with better packaging to come in from other parts of the world.

He discloses that counterfeiting of products within the Nigerian market is another challenge militating against the downstream industry. According to Okafor, “A cursory look around Nigeria today shows that the unwholesome display of base oil classified as lubricants sold in water bottled plastics is big issue discouraging investment in manufacturing capacity in Nigeria.”

He however notes that government can assist the industry by putting in place appropriate legislation to arrest the debilitating situation.

It is the expectation of industry players that once government through a sustainable framework is able to curb the importation of substandard into Nigeria, it would help Standards Organisation of Nigeria to be well equipped and manned to combat the counterfeiting of products within the Nigeria market and then put standard.

They say if these are done, it would strengthen the industry to be sanitised, standardise and efficient to be able to compete or become a hub to other West Africa countries.

Analysts insist that the government should provide a bouquet of irresistible incentives to attract the private sector to invest in any area of its needs, no matter the risks. As long as the incentive is competitively attractive, the private sector and private capital will migrate to such project.

Tunji Oyebanji, managing director, Mobil Oil Nigeria plc, notes that easing of regulatory environment would boost investor considerations and hence bring about a competitive environment that would in turn bring about self sufficiency in local manufacturing of lubricants.

Oyebanji observes that the challenges the downstream sector operators are going through when it comes to product counterfeiting will not go away until government appropriately empower its enforcement agencies to perform.

He discloses that the sector has not progressed due to the pervading influence of substandard products in the industry, saying until that is cleared, “we will not see the benefits that accrue to the consumers and the economy at large.”