President Donald Trump’s trade tariff is negatively impacting lubricant markets across the African continent, stakeholders told Blenders ‘N” Dealers. “The trade tariff has increased the cost of raw materials, especially Group III base stocks, bio-based lubes, synthetic lubes and additives,” said Emmanuel Ekpenyong, Aviation Operations Manager, Puma Energy Tanzania. He added that, “The cost increase, though incremental, has significantly impacted operational costs.” Similarly, Irfan Khan, managing director of Gauge Energy Company Limited Tanzania with operations in Uganda said that Trump’s trade tariff has resulted in currency fluctuation and instability in the local lubricant market in the East African sub-region.  “The currency fluctuation is causing instability in the local lubricant market in the sub-region,” Khan said. He explained that it has also caused “high freight charges for lubricants and base oils imports” to the sub-region which has adversely impacted the production of high quality lubricants and thus upsurge in substandard lubricants in the region.

For his part, Patrick Swan, managing member, Aswan Consulting explained that there will definitely be price increases for base oils and additives but added that “I don’t think it will upset the market very much”.  He explained that Trump’s trade tariff is “going to affect additive suppliers more because they will have to in a short term look at their cost”.

However, Ekpenyong added that there is a bright side to the US-China trade tariff war because it may have inadvertently opened opportunities for local blenders to seek local solutions to sourcing raw materials for lubricant production: “However this may have opened up some opportunities for local blenders as more companies are now seeking for local solutions in the area of blending, and local sourcing for lube raw materials.” For his part, Khan said that the Lube blenders in Tanzania are collaborating with the government to ensure that Trump’s trade tariff does not upset the local lubricant market.

By Ochei Courage Ebube