The Nigerian lubes market will be worth N175bn ($1bn) in 2014, according to new research.
With revenue projected to hit N250bn ($1.5bn) by 2015, Nigeria is set to consume about 600 million litres, or one percent, of the total world demand. This makes the African nation the third largest consumer of lubricant oils, according to Kayode Sote, Principal Partner of Lubeservices Associates.
The country has 32 registered blending plants with a total installed capacity of about 965 million litres per annum. The plants are all currently producing at a cumulative average of 45% of their total installed capacity, meaning there is plenty of futureproofing should demand increase. Currently, only 25% of specialised products are imported, with the country producing 75% of its lubricants needs.
Some of the challenges faced by the lubes market are:
- the import of sub-standard and off-specifications poor quality lubes
- the import of excessive volumes of base oil
- low duty tariff on base oils and imported lubes which attract duty tariff of 10%
Nigeria held its first lubricant summit and exhibition in Lagos in August. According to delegates, the Summit was not only an opportunity to showcase locally refined products, but for producers, legislators and consumers alike to discuss the challenges faced by the industry.