This archive report was first published on 2 October 2019.
On October 2, 2019, OLA Energy Kenya, formerly known as OiLibya, urged the government to reduce the cost of doing lubricant business in Kenya.
The company cited high import duties on raw materials, such as base oils and additives, which are charged at 10% in Kenya, while in other African markets, these materials are duty-free.
According to Mazin Binramadan, Global Chief Executive Officer of OLA Energy, the high costs have made it difficult and expensive to export lubricants to neighboring countries like Ethiopia, Congo, Tanzania, Malawi, Zambia, and Zimbabwe.
Binramadan noted that stiff competition from countries like Egypt, India, the United Arab Emirates, and South Africa, who benefit from duty-free manufacturing and other subsidies, has made it challenging for Kenya to compete in the market.
He added that if base oils and additives were made duty-free, Kenya could become more competitive in domestic markets and reduce the incentive for smuggling products into the country.
OLA Energy Kenya General Manager, Millicent Onyonyi, also emphasized the need to eliminate illegal Liquid Petroleum Gas refillers through policy reforms to make the lubricants segment more competitive.
Onyonyi noted that a vibrant lubricant industry would create more jobs not only in the lubricant manufacturing industry but also in package manufacturing, transportation, construction, and manufacturing industries.
