The Lubricant Producers Association of Nigeria (LUPAN) has expressed concerns over the newly introduced Lubricant Import Licence policy by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), warning that the move could cripple local production, lead to massive job losses, and undermine the overall national economic goals.
Mustapha Muhammad, chairman, LUPAN and founder of AMMASCO Group, stated this during the import license workshop held at the NMDPRA Headquarters in Abuja on Tuesday.
He condemned the unrestricted issuance of import licences for finished lubricants, describing it as a threat to indigenous manufacturers already operating below capacity.
The Lubricant Import Licence is an official authorisation granted by the NMDPRA to eligible companies to legally import lubricant products into Nigeria. Its aim is to ensure regulatory compliance, uphold quality and safety standards, and enable traceability within the supply chain.
However, LUPAN argues that the policy, in its current form, disproportionately favours importers over local producers.
“We are not against regulation, but issuing permits for the importation of finished lubricants by force will destroy our industry. Most of our members are producing at just 30 to 40 percent of their capacity due to poor demand and market infiltration by substandard imported products,” Muhammad said.
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He warned that the continued importation of low-grade, recycled lubricants, especially those transshipped through hubs like Dubai, is flooding the Nigerian market with inferior products that damage vehicles and suppress demand for locally made, higher-quality alternatives.
Muhammad revealed that many LUPAN members are unable to compete due to high production costs, forex volatility, poor infrastructure, and multiple taxation. “Those importing base oils are selling cheaper than our members can produce. Many have lost billions of naira and are being forced to lay off workers,” he said.
The association, which comprises over 200,000 direct and indirect jobs across Nigeria, emphasised that its members have the installed capacity to meet both domestic and West African market demands, but are underutilised due to policy inconsistencies and poor support from government agencies.
Emeka Obidike, Executive Secretary, LUPAN, said the policy could reverse the modest gains recorded in Nigeria’s lubricant sector in recent years. He argued that it runs contrary to the Federal Government’s backwards integration strategy and the administration’s agenda aimed at revitalising domestic industries.
According to him, the unintended consequences of the policy may include widespread factory shutdowns, rising unemployment, and increased machinery failure across the country due to the influx of low-quality imported lubricants.
Obidike warned that, if left unchecked, the policy risks making Nigeria overly dependent on foreign products, thereby stalling industrial growth and hindering local innovation. He called for the implementation of stricter guidelines in the issuance of import licences, urging that only companies with verifiable blending plants and demonstrated production capacity should be considered.
Stressing on the association’s position, he said, “We are not asking for protectionism; we are asking for fairness. Let the authorities support producers who are building Nigeria’s economy. Let us create jobs, not lose them.”
In response, Farouk Ahmed, the chief executive officer, NMDPRA, acknowledged the concerns raised and affirmed the agency’s commitment to supporting local content and industrial growth.
Representing the CEO, Francis Ogaree is the Executive Director of Hydrocarbon Processing Plants, Installation & Transportation Infrastructure (NMDPRA) stated that the licensing policy was not designed to stifle local manufacturers, but to create a structured and enforceable mechanism that would eliminate unregulated imports and restore consumer confidence in the quality of lubricants available in Nigeria.
According to Ogaree, the policy aligns with the broader economic vision of President Bola Tinubu’s administration, which emphasises industrialisation and job creation through local production. He said the president’s stance on creating platforms for domestic producers to thrive reflects a renewed national focus on building internal capacity.
“Encouraging local production is at the heart of this administration. What we want to achieve is a balance—supporting those who have invested in production while discouraging the unchecked importation of harmful and adulterated products that damage not just engines, but our entire economy,” Ogaree explained.
He noted that the current situation, where local manufacturers are producing at less than half their potential while substandard lubricants saturate the market, undermines investor confidence and the drive for backwards integration. Ogare emphasised that if indigenous industries are enabled to meet the shortfall in supply, foreign dependence would reduce significantly, and more jobs would be created.
“Nigeria has a population of over 200 million people. If our industries run at full capacity, the ripple effect on employment, industrial growth, and investor confidence would be immense. This is not about shutting doors but about streamlining processes to strengthen local production,” he said.
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