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Stakeholders appeals to FG to stop arbitrary levies on base oil

By Charles Nwaoguji

Stakeholders in base oil subsector has called for the removal of administrative charge on the lubricant by the Petroleum Products Pricing Regulatory Agency ( PPPRA) and arbitrary levies by various government agencies.
According to the Executive Secretary of Lubricant Producers Association of Nigeria. (LPAN), Mr. Emeka Obidike, the manufacturers have been tasked with the payment of levies, charges dues, or the demand for certification or licensing, all on a single product- Base Oil, by various, and in some cases unauthorized Agencies under spurious administrative jurisdictions, designations and initiatives, on pain of having their consignments detained or confiscated, premises sealed and business commitments compromised, despite being shown a genuine DPR license, the most persistent of which, currently, is the Petroleum Products Pricing Regulatory Agency.
Obidike explained that Base oil is hundred percent import-dependent, which risk is solely borne by the importer; unlike other white products, attracts duty of 5%, and is not subject to regulation as its pricing is subject to market forces, adding that there is also a patent lack of government intervention (Subsidy) and favourable policies.
He stated that the guidelines formulated in line with their mandate of regulating supply and distribution of petroleum products is a blatant duplication of the functions and powers of the Department of Petroleum Resources (DPR).
“The administrative and bureaucratic bottlenecks and hoops through which manufacturers of lubricants are made to maneuver as well as the series of certifications, authorizations and clearances by relevant and more often unauthorized agencies with their attendant fees levies, charges, duties and taxes 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 locally made lubricants making it less attractive than it imported substandard counterpart,” he stated.
He noted that the general attitude of government agencies towards indigenous businesses are patently hostile, 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.
He said that legalized businesses are constantly picketed, threatened with the shutting down/sealing of their plants, confiscation, seizure and destruction of products purchased with bank loans and are persistently being faced with the risk of bankruptcy, corrosion of their goodwill and professional integrity and foreclosure of facility used to secure loans.
He stressed that investors hoping to venture into the sector find themselves beholden to as much as three to four agencies licensing the importation of base oil, asides from others that inspect and clear.
He stated that if the base oil sector is fully utilized the total installed capacity of licensed lubricant plants is more than enough to sustain the local market and even export, as we have as of present, 50 DPR-licensed lubricant plants.
He noted that if fully utilized the total installed capacity of licensed lubricant plants is more than enough to sustain the local market and even export, as we have as of present, 50 DPR-licensed lubricant plants..
He appealed to government avail the sector its full support by way of viable accommodating industry – friendly policies, incentives, palliatives and intervention funds and in general foster encouraging fiscal conditions favourable the sector’s growth., adding that PPPRA and other unauthorized Agencies be barred from further taxing, levying, charging and licensing base oil.
Stakeholders appeals to FG to stop arbitrary levies on base oil
By Charles Nwaoguji
Stakeholders in base oil subsector has called for the removal of administrative charge on the lubricant by the Petroleum Products Pricing Regulatory Agency ( PPPRA) and arbitrary levies by various government agencies.
According to the Executive Secretary of Lubricant Producers Association of Nigeria. (LPAN), Mr. Emeka Obidike, the manufacturers have been tasked with the payment of levies, charges dues, or the demand for certification or licensing, all on a single product- Base Oil, by various, and in some cases unauthorized Agencies under spurious administrative jurisdictions, designations and initiatives, on pain of having their consignments detained or confiscated, premises sealed and business commitments compromised, despite being shown a genuine DPR license, the most persistent of which, currently, is the Petroleum Products Pricing Regulatory Agency.
Obidike explained that Base oil is hundred percent import-dependent, which risk is solely borne by the importer; unlike other white products, attracts duty of 5%, and is not subject to regulation as its pricing is subject to market forces, adding that there is also a patent lack of government intervention (Subsidy) and favourable policies.
He stated that the guidelines formulated in line with their mandate of regulating supply and distribution of petroleum products is a blatant duplication of the functions and powers of the Department of Petroleum Resources (DPR).
“The administrative and bureaucratic bottlenecks and hoops through which manufacturers of lubricants are made to maneuver as well as the series of certifications, authorizations and clearances by relevant and more often unauthorized agencies with their attendant fees levies, charges, duties and taxes 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 locally made lubricants making it less attractive than it imported substandard counterpart,” he stated.
He noted that the general attitude of government agencies towards indigenous businesses are patently hostile, 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.
He said that legalized businesses are constantly picketed, threatened with the shutting down/sealing of their plants, confiscation, seizure and destruction of products purchased with bank loans and are persistently being faced with the risk of bankruptcy, corrosion of their goodwill and professional integrity and foreclosure of facility used to secure loans.
He stressed that investors hoping to venture into the sector find themselves beholden to as much as three to four agencies licensing the importation of base oil, asides from others that inspect and clear.
He stated that if the base oil sector is fully utilized the total installed capacity of licensed lubricant plants is more than enough to sustain the local market and even export, as we have as of present, 50 DPR-licensed lubricant plants.
He noted that if fully utilized the total installed capacity of licensed lubricant plants is more than enough to sustain the local market and even export, as we have as of present, 50 DPR-licensed lubricant plants..
He appealed to government avail the sector its full support by way of viable accommodating industry – friendly policies, incentives, palliatives and intervention funds and in general foster encouraging fiscal conditions favourable the sector’s growth., adding that PPPRA and other unauthorized Agencies be barred from further taxing, levying, charging and licensing base oil.

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