Smuggling of lubricants, grease: illegal business thriving

Illegal business of lubricants and grease is thriving as their share reaches 35 percent of local consumption. Sources said by the end of the last fiscal year smuggled lubricants/ grease share was estimated at 25 percent of total local consumption. Roughly 10 percent increase in illegal inflow has changed market trend in favour of smuggled products.
Lubricants and grease demand is estimated at 392,000 and 20,000 tons per annum and local industry contributes 190,000 tons. Reclaimed plants contribute around 10,000 tons lubricating oil. Around 30,000 to 40,000 ton lubricants are imported through legal channel and the rest 140,000 tons make entry into Pakistan through smuggling.
Sources said Iran is the main source of lubricants smuggling into Pakistan. The basic raw material used in the manufacturing of lubricating oils / grease is lube base oil (LBO) is solely produced by the National Refinery Limited, Karachi,
Fake/substandard lubricants business is also thriving. It not only hurts the local industry, but also damages automobiles due to poor quality. Big gap in the prices allures the buyers to opt for smuggled lubricants/ grease. The buyers do not think of their negative side-damage done to the automobiles. Smuggled lubricants are cheaper by Rs 5 to 7 per litre and this difference is enough to make them an attraction to the buyers.
Lubricants smuggling is causing Rs 2 to 3 billion loss to the national exchequer every year. The volume of smuggled lubricants clearly indicates that the government departments assigned monitoring and checking of smuggling of lubricants/ grease have not been functioning effectively.
The government authorities concede that a large potion of lubricants/ grease comes into Pakistan through illegal means but they look helpless in making some foolproof arrangement to ensure that smuggled products do not make their way into Pakistan. They must think of readjustment of taxes and other levies to make locally produced and legally imported quality products marketable at reasonable price. The menace of substandard products can be discouraged through effective administrative measures.