Industry insiders said they expect state-owned Nigerian National Petroleum Corp. to make waves with its entry into the country’s lubricant market last November.
NNPC claims that it aims to reduce use of substandard products in the West African nation. “We have launched our brand of lubricants, and there are plans to expand to other markets in the sub-region, but our major focus is on the Nigerian market for now,” Haruna Abdurrahman, manager of lubricants for NNPC Retail, told Lube Report by phone.
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He explained that, “considering that NNPC is a formidable brand, some people who patronize substandard products will be won over and through that means we are helping to reduce the scourge of substandard lubes in Nigeria.”
Taiye Williams, managing director of Lubcon International Lubricants, said NNPC has enough clout to impact the market.
“The NNPC brand is very formidable,” he said. “So, you can imagine how much impact it would have on the local lubricant market in Nigeria. It will bring very strong pressure on substandard lubes,” Williams said.
Based in the capital of Abuja, NNPC is a 41-year-old integrated oil company, engaged in exploration and production of petroleum, refining, distribution and petrochemicals. For numerous years it intermittently produced base stocks at one of its four refineries – in Kaduna – but the base oil plant has been dormant for several years now. The company has not previously sold finished lubricants.
Emeka Obidike, executive secretary of the Lubricant Producers Association of Nigeria, said the Nigerian market has space for NNPC’s products. He suggested that existing suppliers could benefit from the entry of a state-owned company by making the government more sympathetic to industry causes. “Hopefully, as a [state-run oil company], it will help them to appreciate our challenges and result in better policies for the lubricant market in Nigeria,” Obidike said.
However, Obidike expressed skepticism that the launch of NNPC lubricants will do much to reduce the amount of substandard products. Progress on that front will require an inter-agency collaboration among government agencies and between private stakeholders such as Lupan and the Major Oil Marketers Association of Nigeria.