These products make it difficult for legitimate companies to do business in Nigeria. And according to local marketers, the situation turned significantly worse recently – bad enough that they have asked the Nigerian government for help and warned that local companies could go under without it.

This magazine empathizes with their plight and supports some changes sought by the companies. However, we oppose one proposal – a request for a steep increase on tariffs for finished lubricant imports. Its a protectionist plan that would hurt the Nigerian public and, in the long run, the domestic lubes industry.

Tariffs for imports of both lubricants and base oils currently stand at 10 percent. Hoping to lower their own costs, the Lubricants Producers Association of Nigeria has asked the government to reduce the base oil tariff to 5 percent. Thats reasonable, but Lupan also wants to increase the tariff on finished lubricants to 50 percent. Domestic companies say they need the higher tariff to protect them from fake and substandard lubes being dumped on the market. These products may be low quality, but they are also cheap, and many Nigerian consumers apparently are won over by the price. The association says the higher tariff would force importers to raise prices, making it easier for locals to compete.

That may sound tempting, but it misses the mark. Theres no question that some of the lubricants imported to Nigeria are substandard, but certainly some imports do meet acceptable quality levels, and these products would face a cost disadvantage similar to the one that Lupan members are complaining about. With a 50 percent tariff, end users of these products would at least face higher prices. Its also possible that some legitimate, quality imports would be run out of the market, thereby denying choices to end users.

A 50 percent tariff would also be unhealthy for Nigerian lubricant marketers. Russias lubricant industry offers a good lesson of the folly of isolating a market. Closed for decades to outside competition, the industry in Russia and the former Soviet Union stopped innovating and fell behind international suppliers. Now that the market has opened, Russian companies are striving to catch up, but climbing out of their hole has not been easy.

Instead of trying to hamper competitors indiscriminately, Lupan members should concentrate on the products that are the problem. In fact, industry and government have pursued a number of good ideas: establishing a licensing program to ensure that base oil imports go only to legitimate lube blenders; clamping down on sales of lubes in used containers; a public education campaign about the importance of using quality lubricants.

Unfortunately, these efforts have made little impact and likely will require years of commitment before they do. In the meantime, Nigerian lubricant marketers continue to struggle. But that doesnt make protectionist tariffs a good idea.