Smuggling and double taxes are the abysmal hurdles in developing Lubricants Industry
An exclusive interview with the Chairman of Korangi Association of Trade & Industry (KATI)
Mian Zahid Hussain

BY : Mawaiz Khan Akash
BM. How do you cope with the responsibilities being the chairman of APLMA and LBSP?
Ans: The divine purpose of APLMA AND LBSP is to gather the people on a platform and to find solution of their problems linking to this industry. As I see it that the main problem in lubricant is smuggling which needs urgent attentions. The lubricant is included in double tax apart from excise duty; the sales tax is also imposed. As a matter of fact in our part of the world the lubricant is supposed to be expensive and this reason is creating many losses, it is expensive for consumers and secondly smuggling comes into existence due to its expensiveness. We are making our best to resolve these issues and problems from the platform of APLMA. The alarming fact is that duplicates of famous brands of lubricants are also sort of concerned for that we are in contact the representatives of Government.

BM. Throw light on the other purpose of APLMA AND LBSP?
Ans: Both associations play the role to check & watch the step and decision, which are applied on Lubricant industry by the government. Lube refinery is an important unit of National refinery. Only national refinery is prepares material for lubricants, which is now the plant of Attock Petroleum Company after the privatization.

BM. Would you like to mention the obstacles and hurdles pertaining to Lube Industry?
Ans: First of all I would like to tell about UAE Lubricant Industry, where more than 225 plants are working round the clock. These blended products have been exported more than sixty countries around the world. On the other hand in Pakistan the government has specified approximately 50 blending plants, in which only 18 or 20 plants are merely working able. It means our market has appropriate potential but the government policies are not favourable regarding the export of lubricants products. Taxation system is too complicated and harmful. Right now the total demand of this product in Pakistan is almost Four lac tons annually, in current situation the local industry is producing only two lac tons per annum. In the mean time forty to fifty thousands ton based oil has been imported. So the rest of demand is being accomplished by smuggling and other illegal means. It is worth mentioning here that the market we could share of more than one million, are not doing. In overall country development 1.73 million ton lubricating oil is being used in Automobiles Industry that is 86% of all. According to the world report relating to South Asia, Pakistan uses 20% lubricating oil of total production of Sri Lanka, Nepal and Bangladesh while the 75% is being used in India. Again, I would say that taxation and smuggling are the main obstacles in growth of lubricants industry. Additionally government can play crucial and pivotal role to improve and enhance the industry and also should have efforts into the export.

MB. To which aims & objectives you made the acquisition of your priorities?
Ans: The main problem is the smuggled lube oil that crumbling the industries and the economy of the country. It will be our best try to grasp the market and government should also effort into the export. We have been taking into confidence the SBP that Pakistan lubricants should be included in export refinance scheme so that our country, locally, could gain foreign exchange by prepared local lubricants. I want to bring into your notice that the Trade Development Authority of Pakistan verified and termed it exportable while suggesting the State Bank of Pakistan to include it in refinance scheme but SBP refused to accept the suggestions due to unknown reasons. This created not only discouragement and dismayed the local level industry but also our country deprived foreign exchange. In this connection the government needs to implement and promulgate the clear and obvious policies.

BM. What is the connection between lubricant standard and environmental pollution?
Ans: There is abysmal relation between them. American Petroleum Institute has provided some rules & regulations to examine the lubricant. Apart this American Standard of Testing Metals and Society of Automoto Engine are there to judge the standard of lubricants. Preparation of lubricant according to international standard, is essential in this sense that it lube oil using in motors witnesses the different seasons and environment so it becomes necessary to maintain the standard of lubricants universally. American Petroleum Institute introduces such rules & regulations that maintain the standard of lubricants at international level and faces the environment and whether conditions as well. In lubricants Editoes plays main role that is checked by Auto Motto Society. The main purpose of the establishment of this society is to protect the environment due to which lubricant's production and preparation is possible.

BM. Would you like to convey message to business community through our magazine Business Monitor?
Ans: All the problems and issues pertaining to lubricants should be solved on priority bases. The Taxation should be made easy as much as possible. Our industry KENLUBE has international quality and standard and also certified by ISO 9002.    mawaiz.khan@businessmonitorpk.com

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