Ola Energyurged the Kenyan government last week to lower its import duties on base oils and lubricant additives to allow lubricants blenders with the country to be more competitive in the regional market.
The company said Kenya charges a 10 percent duty on such products while countries elsewhere in Africa and nearby regions may charge duties on finished lubes but not the raw materials.
It has been very difficult and expensive to export lubricants to other countries like Ethiopia, Congo, Tanzania, Malawi, Zambia and Zimbabwe due to stiff competition from other countries, namely Egypt, India, United Arab Emirates and South Africa, who benefit from duty free manufacturing and other subsidies, Ola Energy CEO Mazin Binramadan said in a press release last week, according to several local news organizations.
If base oils and additives are made duty free, Kenya will become more competitive in domestic markets and subsequently reduce the incentive for smuggling products into the country, he continued.
Managing Director of Ola Energy Kenya Millicent Onyonyi echoed the sentiments of Binramadan. A vibrant lubricant industry means more job creation not only in the lubricant manufacturing industry but also in package manufacturing – plastics and steel containers, cartons and labels. Removal of the duty on base oils and additives will help other sectors of the economy as lubricants are intermediate products in transportation, construction and manufacturing industries, she said.
Ola Energy, formerly OiLibya, operates a lubricants blending plant in Mombasa, Kenya. The company is also a petroleum distributor and marketer and operates retail stores.