LUPAN protests arbitrary increase of admin charge on base oil

From Isaac Ojo Nnewi

The Lubricant Producers Association of Nigeria (LUPAN), has expressed disapproval over the decision of the Petroleum Product Pricing Agency (PPPRA) to arbitrarily inflate raise its charges from N0.10Kobo to N1.23Kobo per litre of imported base oil.

LUPAN, in a press release signed by the Executive Secretary, Mr Emeka Obidike, expressed worry that PPPRA always insisted on the registration of operators already licensed by the Department of Petroleum Resources (DPR) to import base oil, despite being shown a genuine DPR license.

“Over time the Association has been besieged by complaints from operators of being tasked with the payment of dues, charges, levies and/or compelled to register with Agencies irrelevant to their operations or the sector as a whole; Operators, on pain of having their consignments confiscated, find themselves acceding to their demands, and further find themselves inundated by a deluge of paperwork, draconian directives, bureaucratic protocols, all culminating in the delayed release of consignments, accrual of unwarranted demurrage, other ancillary expenses and the eventual hike in price of blended lubricants”, Mr Obidike noted.

He said severally the association has written the PPPRA on behalf of its members protesting this state of affairs and categorically stating that by the Petroleum Act, the Department of Petroleum Resources is the primary regulator of the petroleum sector, overseeing activities that relate to production, importation and exportation of petroleum products and indeed all affairs relating to the oil and gas industry (upstream, midstream and downstream) and that the PPPRA’s continued refusal to acknowledge this fact could be construed as a blatant disregard, duplications and encroachment on the authority and jurisdiction of the DPR.

“Base oil is a raw material that undergoes further value addition, unlike other white products; 100% import-dependent, likewise the additives applied, which risk is solely borne by the importer; attracts duty of 5%, and is not subject to regulation as its pricing is subject to market forces. There is also a patent lack of government intervention [Subsidy] and unaccommodating policies.

“That the administrative and bureaucratic bottlenecks through which importers of base oils/manufacturers of lubricants are made to maneuver as well as the series of certifications, authorizations and clearances with their attendant levies and charges are potently detrimental to the business as they are in most cases time consuming, increase the expenses and other ancillary costs connected to receiving the product and significantly inflates the market cost of indigenously produced lubricants making it less attractive than it imported substandard counterpart.” Obidike noted.

He pointed out that the general attitude of government agencies towards indigenous businesses are patently hostile, undermine, and is against the spirit and grain of the Governments policy on the Ease of Doing Business , as they are swift to shut down and mete out stringent penalties at the slightest hint of non-conformity or administrative oversight rather than assist same to regularize.

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