Changing attitudes key to developing West African base oil market
Ross Yeo
06-Nov-2014
CAPE TOWN
(ICIS)–Changing the attitudes and mindsets of West Africans
will be vital to ensure the region’s base oil and lubricants
industry keeps step with global developments, a lubricant
blender said on Thursday.
Obinna Onuoha, MD/CEO of Premier Petroleum, said that 92% of
the region’s lubricants are based on Group I base oils, with
just 5% penetration on Group II and 3% Group III or other
grades.
These figures are in contrast to global trends, where
Group I prevalence is decreasing because of a wave of new
Group II and Group III capacity. Groups II and III base oils
are superior in quality, and cost less to produce than Group
I.
Onuoha said it is largely the entrenched attitudes of
consumers that are preventing West Africa from embracing
these superior grades, even as their prices decrease.
One such example is the practice of changing a vehicle’s
engine oil every 14 days or so. Such practice is required
with cheap, low quality oils. Yet Onuoha said few vehicle
owners would be likely to change this even if they were
provided with a superior quality oil that only required
changing once a year, this rendering it
cost-ineffective.
West Africans are also very brand loyal, said Onuoha, making
it extremely difficult for any new lubricant blenders to
enter the market. Instead, those companies that have been
present in the region for decades enjoy dominance with little
competition, and therefore new products are rare.
There is also a high degree of suspicion, particularly
with regard to re-refined engine oils. 42 gallons of crude
oil will yield 0.5 gallons of base oil, while the same volume
of re-refined used engine oil will yield 34 gallons of base
oil.
Such returns are clearly cost-effective, yet Onuoha said any blending company seen to be re-refining would be likely to suffer greatly, such is the stigma of selling ‘used’ oils.
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