Transport’s lube consumption foreseen at 290 million litres in 2016

KARACHI: The consumption of lubricants in Pakistan’s transportation sector will likely to reach 290 million litres next year as the local lube market is growing at a fast pace, a top official at a petroleum company said.
“However, we are highly concerned about the influx of smuggled oil into the country and an open sale of counterfeited recycled oil in local markets,” Mujtaba Jafarey, chief executive officer at Byco Petroleum Pakistan Limited told The News.
“Counterfeiting of oil products and sale of recycled black oil in the bottles of established brands are high in Pakistan,” Jafarey said. “This forced Castrol to quit the market. Castrol’s GTX is not available in the market anymore.”
He said transport sector is the largest lubricant consumer in Pakistan, generating business for all oil marketing companies. The sector guzzled 240 million litres of lubricants in 2012. Overall volumes of local consumption and exports (to Afghanistan) stand at around 390 million litres, he added.
Byco chief said the country’s fuel market is regulated and therefore companies’ margins are fixed. This practice is hurting the competition. Once the business is deregulated, the industry will flourish and consumers will have a better service, quality and a choice, he added.
Byco that has the country’s largest refining facility with an installed capacity of 155,000 tons provides fuel to almost all the oil marketing companies. It also markets fuel products, including diesel and petrol under its own name.
After making an impression in the industrial lubricants market, Byco Petroleum has entered into the automobile lubes business. It has planned to capture 6.0 percent share of the total lubes market in the next five years. Besides, Byco, which has a 256 fuel retail outlets, has also planned to add 25 outlets to its network every year.
The company has already soft-launched its automobile lubes and the product is second to none. “Presently the product is only available at 256 fuel retail outlets of Byco, while we plan to launch our automobile lubricants into the high street market next month,” Jafarey said. Byco procures base oil from the National Refinery Limited and gets blending done from third-party as per the formulations.
Pakistan’s lubricants market size as per the line of business consists of consumer, transport and industrial market. These three categories have different sectors through which lubricants are sold.