Pakistan lubricant, base oil demand to rise as vehicle usage grows

09 October 2012 17:35  [Source: ICIS news]

DUBAI (ICIS)--Demand for passenger cars in Pakistan is set to grow by 18% to 3.47m vehicles by 2015, from 2.93m in 2011, leading to an increase in lubricants and base oils consumption, an industry official said on Tuesday.

“The lubricants market for passenger cars and motor cycles in Pakistan, which is currently around 90,000 tonnes/year, will increase in line with the growing demand within these segments,” said Yasin Rizvi, chairman of the Lubricants Business Society of Pakistan and vice-president, Total Oil Pakistan.

He was addressing delegates at the two-day ICIS Middle East Base Oils and Lubricants Conference in Dubai.

The motor cycle segment, currently consisting of 8m vehicles, is expected to record much higher demand growth than the passenger car segment, Rizvi said. This is because of Pakistan’s low per-capita income, he added.

“Few Pakistanis can afford to buy cars, whereas many more are in a position to buy a motor cycle,” he said. Pakistan’s economy has been hit by political instability, recession, floods and a continuing power shortage in recent years, causing the GDP to grow by only 2.4% in 2011, he pointed out.

Pakistan’s imports of base oils are set to increase in the coming years, as the lubricants market grows, said Rizvi. Around 20,000 tonnes was imported in 2011, up from 15,000 tonnes in 2010.

The country has only one local producer, the National Refinery Ltd (NRL), whose nameplate capacity is around 200,000 tonnes/year of Group I base oil, which includes virgin and reclaimed base oils. “But Pakistan’s total base oil market is around 248,000 tonnes/year currently, hence the need for imports,” added Rizvi.

Moreover, NRL produces surplus volumes of Group I grade but has no production of Group II and Group III grades, so these  have to be imported, he said. Two local refineries were evaluating the feasibility of producing Group II and II base oils, but this was still at a preliminary stage, said Rizvi.

By: Prema Viswanathan
+65 6780 4359

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