Changing attitudes key to developing West African base oil market

Ross Yeo

06-Nov-2014

Base oils main application is engine lubricantsCAPE 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.

READ MORE

Global News + ICIS Chemical Business (ICB)

See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.

Contact us

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?