Nigeria might miss out on booming lubricant market unless radical changes are embarked

Despite the countr y’s abysmally low refining capacity and its non-existent automobile industry, Nigerians are forecast to spend $683 million by 2023 on automobile lubricants. This is extremely good news for the economy, especially the industry players because a segment of it is expanding quickly but also bad news because the bulk of this spending will be taken out of the economy, unless some radical changes are made in the country.

According Research andMarkets, a leading research firm, the Nigerian automotive lubricants market is projected to reach $683 million by 2023. The Ireland based firm said that “the increasing preferences for vehicles for personal mobility and easy access to finance are among the key factors driving sales of automobiles in the country, which in turn is increasing demand for lubricants used in automobiles.”

There are various types of automobile lubricants, and the most commonly used one is motor oil. In Ni-

The Nigerian automotive lubricants market is projected to reach $683 million by 2023

geria, it is used for cars and also power generating sets. Others include gear oil, transmission fluid, grease and so on.

Nigeria is heavily dependent on importation when it comes to cars and lubricants. Looking at Nigerian roads and the cars that ply them, it may seem that the country never had an automobile industry but it certainly did. In the 1950s, production of passenger cars and commercial trucks were carried out in the country by Federal Mo- tors Industries and SCOA. This continued well into the 70s as the country was riding the oil boom, but towards the end of the 1980s, recession started kicking in, which made the federal government cut funding to some sectors of the economy, which the industry was one of and the cost of locally producing cars skyrocketed.

By 2000, most cars on Nigerian roads were used and imported for abroad because they were affordable and available.

Another reason for the dearth of the automobile industry was the scaling down of purchases of Nigerian made cars by the federal government.

Financial Times reported that Leyland’s production, a U. K. automobile manufacturer with an assembly plant in Nigeria was greatly influenced by government spending, and since government didn’t patronize Nigerian car manufacturers, production fell rapidly.

Also, automobile lubricants are not produced in the country as refining capacity of crude oil into re- fined petroleum products is really low, it falls below 30 percent according to the country’s oil corporation, Nigerian National Petroleum Corporation (NNPC). The country has four refineries but together they refine less than 500,000 barrels per day.

Regardless of these mammoth challenges, some right steps have been taken to drive the country forward. Nigerian manufacturers are optimistic about the future of the automobile industry and are establishing car assembly plant in the country. Some examples are PAN, Stallion and local brand Innoson. Innoson is the major Nigerian owned brand and was commissioned in 2010 with an installed capacity of 10,000 vehicles a year. But more support from government and private investors needs to be given to the manufacturers because they are facing the likes of Toyota, Land Rover and the rest.

Also, on the issue of refined petroleum products, major and modular refineries like Dangote refinery, Azikel refinery and others are expected to come on stream soon but more progress is yet to be made on the existing refineries which are old, redundant and operating below capacity.

Some of the major players operating in Nigeria automotive lubricants market include Mobil Producing Nigeria Unlimited ( MPN); Chevron Nigeria Limited ( Forte Oil Plc); Oando Marketing Ltd; MRS Oil Nigeria Plc; Grand Petroleum and Chemicals Limited.

Others are Ammasco International Limited; Shell Petroleum Development Company; TOTAL Nigeria Plc; Castrol Limited (Eterna Plc); and Techno Oil Ltd.