Multiple levies, licences threaten N750bn lubricant sector investment

Lubricant Producers Association of Nigeria (LUPAN)’s investment of over N750 billion is being threatened by multiple government agencies demanding different levels or licensing of single product – based oil, the group has said.

According to the group in a petition to the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, LUPAN members are going through the pain of having their consignments detained or confiscated, plants sealed and business commitments compromised by Petroleum Product Pricing Regulatory Agency (PPPRA).

The group said in the petition signed by Chairman of the association, Chief Anthony Enukeme and the Executive Secretary, Emeka Obidike, 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, is not obtained from chemical synthesis, and as such, by virtue of the Petroleum Act, the DPR is the primary regulator of the petroleum sector and its sub sectors, its duty of the issuance of licenses for the importation petroleum products, finished lubricants inclusive, by virtue of this position is sacrosanct.

“These agencies, by their enabling laws, are neither authorized nor granted jurisdiction, to either license or levy base oil, and that their claims to such are merely a duplication of the powers and functions of the DPR.

“The price of base oil is not stable, and as such not subject to regulation; notably bereft of government intervention via funds, loans are sourced from banks with asphyxiating interest rates. Also, manufactures are left at the mercy of market forces such as oil grades, supply and demand, as well as the exchange rate, amongst other factors.

“Base oil attracts duty of five per cent and further incurs costs via production, which is not the case with white products.”

Obidike insisted that the DPR has been clarified about the base oil being petrol base, crude oil derivatives, “but the agencies remain adamant in their demand for dues and licensing from DPR licensed blenders. We have also written National Agency for Food, Drugs, Administration and Control (NAFDAC) requesting a formal statement on the verdict by the Minister for Health on the issue, and are yet to get any response on same. Find contained herewith, various correspondences with the aforementioned agencies on the issue of levying and multiple licensing.”