Rest of the world is moving towards the lighter viscosity multi-grade oil, where the major market share of our country is controlled by the mono-grade oil. However, the demand and acceptance of multi-grade oil is growing in the automotive sector.
The mono-grade engine oil holds the major market share of Bangladesh. Around 70% of the purpose of automotive and agricultural machinery needs are met by mono-grade oil.
The agriculture-based economy, outdated public transport, and the industry standard keep roles for the mono-grade oil market.
The agricultural pump-sets, shallow machines, second-hand machinery, local transports, and the repair industry are the key users of this single-grade oil.
The demand for agricultural lubricants in our country is expected to grow at 12-15% between the periods of 2018 to 2023.
SAE 40 and SAE 50 mono-grade oils are highly-sold agricultural lubricants in rural areas.
However, the mono-grade oil, especially for the multi-purpose use, as well as the agricultural machinery, has made this market a significant one.
The provision of subsidy for agricultural machinery and the increased mechanization in the agricultural industry are the key drivers of this oil segment.
In 2009, the government took up a Tk 150 crore scheme to speed up farm mechanization by offering 25% subsidy for agricultural types of machinery such as power tillers, tractors, power threshers and combine harvesters.
However, the key restraints are the availability of recycled oils in the market. And the lack of knowledge among small-scale farmers is also a concern.
Many unscrupulous businessmen are involved in recycled oil trade causes the availability of lower-standard barrel products.
Recycled lubricants can be harmful in the harsh environmental and operating conditions – such as cold, heat, dirt and water – that can be detrimental to a lubricant’s performance in your equipment.
Farmers and other agricultural customers with automatic lubrication systems to ensure that their equipment is lubricated with the right lubricants, in the right amount, at the right intervals.
Above all, most users are not aware of quality oils.
Recent years, the number of local oil marketers has been increased dramatically. They are the floating businessmen who deal in this market beyond the value chain.
Most floating marketers trade on the barrel oil especially works with mono-grade oil by a different local name.