In our country, the base oil demand is the highest thanks to increasing automotive sector and the agriculture-based economy. The growing motorization rate is the key to this demand which will, in turn, increase the demand for base oil.
The growing industrial sector requires a greater import of efficient machinery to be used in the factories. Various automotive vehicles in the transport sector require lubricants too, which come from base oil.
Therefore, the base oil demand is expected to witness steady growth in Bangladesh. And the market size is expected to increase due to these factors amid its economic growth.
The demand from the industrial equipment application also accounts for a major share of the total lubricants market and is driven by increasing number of investments in the end-user sectors such as power generation, manufacturing, logistics, automotive manufacturing and others.
In recent years, the growth of power sector has got publicized because of the national agenda, which has also highlighted the industrial lubricants market in Bangladesh.
Lubricant consumption in the industrial sector has increased significantly in the last 5 years. The industrial sector accounts for 30% of total lubricant consumption in Bangladesh.
Unfortunately, we are going backwards. When global base oils market is moving towards high-quality ones to meet the requirement of the modern machinery, around 60% engine oil products of our market is occupied by low-grade oils.
We know, these low-grade oils are produced from recycled base oil. Sometimes these are straight mineral base oil without additives, which form is strictly prohibited to market. But these are being sold and distributed freely in the country.
At the moment, the annual domestic base oil demand is around 140 million litres worth around $133 million.
The annual domestic consumption has got almost 3% yearly growths, which is on par with India but behind China.
However, the lack of market monitoring, the current status of the transport system, least reporting makes this market unnoticeable to the public.
So, this unnoticeable market now is a competitive one. Already, lubricant players have established their footholds here, with international brands.
Market insiders think lack of govt. intervention on the policy to monitor this trade make this market uncontrolled one. And it is high time to bring strong regulations to change this prevailing situation and help the industries and also protect the environment in the process.