LUPAN; Committed to Nigeria Lubes market growth

I n every industry, cooperation among industry players is key in having a healthy working environment. One way of promoting this cooperation and partnership is through forming associations and unions. Associations are created to establish strength and unity in working toward common goals in virtually every profession. These alliances are nonprofit organizations formed to promote the economic or social well-being of their members.

In the lubricants industry, Oil Marketing Companies (OMCs) in different countries have formed organizations that cater for their needs and goals. Lubricants Producers Association of Nigeria (LUPAN) is one of such organizations. Nigeria is Africa’s most populous country and is a huge market for lubricants. It is estimated that Nigeria consumes about 364 million liters of lubricants every year. This consumption grows by more than five percent each year due to the addition of new vehicles and machinery.

LUPAN is made up of lubricant blenders operating in Nigeria and it was started with the vision to develop and promote the lubricant industry as it affects the national economy. Formed in 2009, LUPAN has grown to have close to 40 members. The membership of LUPAN is exclusive to corporate bodies licensed to carry on the business of lubricant blending, by the regulatory body of the Nigerian petroleum sector; the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). These corporate bodies must be indigenous and operate a standard blending plant accredited by the Agency. Some of the members are; Conoil PLC, Oando Petroleum, MRS Oil & Gas Company Ltd, Forte Oil, Grand Petroleum, Eterna and Ammasco International.

The Nigerian lubricants market was deregulated in 1991 leading to the setting up of the first indigenous blending plants in the country. Close to two decades later with more players and more blending plants set up, it was imperative to form an organization like LUPAN, to unify these companies. The aims and objectives of LUPAN are:

LUPAN is made up of lubricant blenders operating in Nigeria. Its membership is exclusive to corporate bodies licensed to blend lubricants by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

• To provide a forum where members can meet and exchange ideas with the aim of improving the economic fortunes of member-companies.

• To formulate policies affecting the objectives of the association.

• To analyze national policies and stakeholders’ opinions on such policies as they affect the common interest of the association.

• To interact with other recognized and influential trade associations and other bodies whose objectives are consistent with the interest of the association.

• To encourage members to operate their business within the laid down rules and regulations guiding the lubrication industry.

• To effectively liaise with the government regulatory agencies such as (Department of Petroleum Resources (DPR), Standards Organization of Nigeria (SON), Petroleum Products Pricing Regulatory Agency (PPPRA) and other interest groups.

• To encourage compliance with local and international standards and specifications.

• To undertake or execute programmes which will promote the interest of the association.

• To develop and promote the lubricant industry as it affects the national Economy.

Over the years LUPAN has taken major strides in achieving these objectives, and especially being vocal about the interests of its members. In terms of liaising with government regulatory agencies, LUPAN has been keen on constantly holding meetings with the government bureaus tasked with ensuring compliance to standards such as DPR and SON. DPR is the statutory body responsible for granting licenses to blenders and the importation of petroleum products in Nigeria, while SON, which is responsible for the enforcement of standards and products specification.

In one such meeting with SON in 2021, LUPAN had a chance to interact with its Director General (DG) Mallam Farouk Salim who acknowledged SON’s existing collaborative relationship with LUPAN and appreciated the Associations’ efforts in the facilitation of a conducive business environment for its industry. One outcome of this meeting was the presentation of three Ford Pickup Utility Vehicles by LUPAN to the Director General of SON, to boost SON’s operational efficiency in the fight against substandard lubricants in the country.

SON certifies products through a coordinated operation that involves planning and implementation of factory/port inspections, sampling and laboratory testing/analysis and reports on local and imported products. Due to SON’s relationship with LUPAN, the members of the Association have been keen to apply industry’s best practices to meet with international standards in a bid to boost the Nigerian lubricant market and to meet rising demands of the global market. Therefore, when SON is of a view that the standards need to be reset, it works with the Association to make it happen.

The pickup vehicles presented to SON by

LUPAN. SOURCE | LUPAN

In another example that illustrates LUPAN’s engagement with the government regulatory authorities, LUPAN in 2020, visited the Director/CEO DPR Engr. Sarki Auwalu at DPR Headquarters where they discussed how to deal with substandard lubricants in the country.

When it comes to speaking up against unconducive business environment and policies that hurt the operations of its members, LUPAN has not shied away from doing so. In 2020, Petroleum Products Pricing Regulatory Agency (PPPRA) which is responsible for price control of petroleum products in Nigeria raised the imported base oil charges by almost four times per Litre. LUPAN issued a statement condemning the act. It also raised a concern on the unfavorable policies for base oil importers and lubricants producers that make operating in the Nigerian market extremely difficult. LUPAN expressed its disappointment to the fact that a government agency such as the PPPRA, which should be at the forefront of every effort and scheme of the government to bring about a more conducive environment for businesses to thrive was undermining the same for lubricants blenders. It also wrote to PPPRA, on behalf of its members, protesting this state of affairs.

LUPAN has formed relationships with notable organizations in the oil and gas industry both locally and internationally, and due to its positive impact in sector, it has gained recognition both regionally and globally as a reference point for information concerning the Nigerian market.

To further support its members, LUPAN has been actively participating in conferences and seminars on the oil and gas sector hosted by both indigenous and international organizations. More so, it has facilitated the attendance and participation of its members at these events, and kept them abreast of the happenings, exploiting every means within its capacity in ensuring members get premium benefits from such occasions. The Association from time to time holds online meetings with it members and in future, it intends to actively delve into hosting webinars and workshop for its members and also affiliates of the lubricant industry.

SON Director General Mallam Farouk Salim (Centre) receiving the pick up vehicles keys from LUPAN officials.

SOURCE | LUPAN

LUPAN has formed relationships with notable organizations in the oil and gas industry both locally and internationally, and due to its positive impact in sector, it has gained recognition both regionally and globally as a reference point for information concerning the Nigerian market. This has led to the Association being invited as an attendee and in some cases a participant to the following conferences and summits:

• The 1st Nigeria Quality Summit;

• The Nigerian Lubricant Summit, sponsored by one of the members of the Association, LUBCON Limited.

• Oil Trading and Logistics Expo, by OTL Africa Downstream, wherein the Association made a presentation on invitation in 2019.

• ICIS Base Oils and Lubricant Conferences.

• Argus Africa Base Oils and Lubricants Conference, held in South Africa in 2015, at which the Association made a presentation, alongside other members.

To deal with the problem of substandard lubricants in the Nigerian market,

LUPAN is supporting more aggressive approaches by regulatory agencies including adverts in newspapers, sponsored articles in mainstream newspapers, newspaper editorials, road shows, posters and bill boards in strategic positions; radio adverts in all languages including vernacular, in particular the local variation of English language, TV adverts and mini TV series sponsored by agencies and regulatory bodies on their own or in collaboration with the private sector.

In the next five to ten years the Association plans to be a major player in the international lubricant market through adopting strategic and dynamic ways of putting its members amongst the world leading lubricant brands, and positively contributing to the sector’s best practices and policies.

While the Nigerian lubricants market has a long way to go to deal with the challenge of substandard goods and adequately supply the lubricants needs of its market, organizations like LUPAN are a necessity to facilitate close collaboration between the players in the industry. This collaboration will play a vital role in advocating for better policies and also strengthen the fight against sub-standard products in this market. .