By Zulker Naeen
Bangladesh’s economy is expected to grow at 6.9 in the current fiscal year (FY18) while the inflation will remain within 6%, according to the latest report of the Asian Development Bank (ADB).
Bangladesh attained 7.2% GDP growth in the last fiscal year despite ADB’s forecast of 6.9% growth while Bangladesh was able to contain inflation at 5.4% in the last financial year.
Perhaps, the booming economy of Bangladesh is now being considered as a key for analyzing its lubricants oil industry, however, it is the most unresearched market in general, even from the global perspective.
However, the Bangladesh market observed as few segments like passenger vehicle oil, motorcycle oil, truck and heavy-duty engine oil, and industrial oil, etc. More segments like railway oil, marine oil, and aviation oil are insignificant compared with other lubricant oil segments.
However, the barrel oil segment, especially the monograde market still holds the significant market demand for the lubricants. The agriculture-based economy and the current standard for this industry kept this barrel market regular.
To ensure a minimum standard for this industry, the government liberalized the lubricant market in 2001. The blending, importing, and distribution of non-additive treated engine oils was also banned and the minimum API standard was set at SC/CC.
During the year 2002–2011, the sale of minimum grade SC/CC products by different private oil companies caused a major shift in market share.
Apart from the monograde market, the growth of power sector and the center of new vehicles in Bangladesh market is created new opportunities for the lubricants oil market.
It has observed that newly lubricants oil brands are entering in Bangladesh and more brands are waiting to take the entry.
According to a source, Bangladesh Energy Regulatory Commission “There are more than 350 application has been filled for getting permission to bring lubricating oil brands in Bangladesh”
However, the alarming matter is that many local brands are being disparate to market their products deploying the toll blenders of the country, which is seen as the forthcoming peril for the existing popular lubricants brands.
The toll blending facility, an open barrel making policy has liberalized an uneven practice, thus created an opportunity for the local lubricants oil business.
The new entrants are trying to enter a market with competitive market pricing, they also believe that most users are concerned with the quality lubricant oil.
However, this belief varies from one marketplace to another marketplace, even one segment to another segment. Above all, most users are not aware of the lubricants oil products, still which is the key barrier for the upcoming brands.
Using the forthcoming market insights, more new brands will enter into this growing lubricant industry. But it is more challenging for the new brands to cope up with this market situation, even to establish in the lubricants oil shelf.