..Demands Full Downstream Oil Sector Deregulation
Yemisi Izuora
Major Oil Marketers in Nigeria are not ready to respond to invitation to resume refined petroleum products importation, at the moment.
The marketers are rather interested in government stepping down the policy of holding on to regulated regime.
They argued that a more clement environment will guarantee return on investment.
Responding to a question during the Nigerian Petroleum Downstream Consultative Summit, in Lagos Thursday Mr. Adetunji Oyebanji managing director of 11Plc, said government should make broader consultation with regard to its planned deregulation policy.
Oyebanji who is also the chairman of Major Oil Marketers Association of Nigeria, MOMAN, said at no time did government stopped marketers from importation.
Oriental News Nigeria understood that the Petroleum Products Pricing Regulatory Agency on Tuesday in Abuja that permits had been given to several marketers to start importing petrol alongside the NNPC.
Before the downstream oil sector was liberalised in March this year, the NNPC used to be the sole importer of petrol, a task it handled for more than two years.
Since 2017, the NNPC was the sole importer of petrol into the country but that would change as reports say with the liberalization of the downstream sector in March this year, the NNPC will no longer be the sole importer of petrol.
An Online publication Economic Confidential reported that the General Manager, Corporate Services, PPPRA, Kimchi Apollo, said the sole petrol importer status of the NNPC had changed, as his agency recently gave various oil dealers permission to import.
“Well, as far as I am concerned, many of them (marketers) have gone to import because they took QMs from us to bring in products and I am sure they are doing that already.
“The QM is just like a pass to go and bring in products. You come to us to say you want to bring in products and then we say go ahead based on the pass that we give.”
Apollo added, “So, some marketers came and they got the go-ahead permit to bring in products. So, they will be bringing in products.”
However, Oyebanji explained that marketers had to shun importation because of inability of government to refund subsidy claims for upward of three years.
He said that it is beyond mere announcements as any move to change the present price control regime must be backed by a law.
In his earlier remarks, Oyebanji expressed concerns that when government announced removal of subsidy few weeks ago and followed by statement about deregulation, stakeholders were taken aback as there was no input from them on those issues, and that marketers need additional clarity on that.
He said that MOMAN fully backs deregulation and wished that subsidy removal is gone forever.
According to him, market forces should be allowed to determine prices of petroleum products as done in deregulated economy, adding that it will engender competition, boost investment and generate jobs as well as providing government with more revenue.
In her contribution, Hajia Amina Maina Group Chief Operating Officer, of MRS Holdings, said that government policies, has discouraged investments in the Depot space of the sector
Maina, disclosed that a standard depot costs about N3 to N5 billion and because of low margin and inappropriate policies many investors have abandoned the business.
She noted that with the NNPC taking over 100 per cent of import and price determination with little margin for depot owners many have left due to huge bank loans and business takeover by AMCON.
According to her, since 2016, NNPC had offered depot owners N2 per litter without considering other expenses that leaves marketers with nothing.
She was optimistic that inverment will blossom if government takes strong measures to deregulate especially now that COVID-19 has set businesses struggling.
On his part, Billy Gills-Harrry, national president, Petroleum Products Retail Outlets Owners Association of Nigeria, advised government to take a strong position on the deregulation exercise to allow more flow of investments in the sector.
Also, Winifred Akpani, MD/CEO of Northwest Petroleum and Gas Company, urged for a proper and determined position by government to encourage a wider investments in the sector by deregulating the sector.
This she said will promote efficiency and transparency as well as improve on refinery projects.
Meanwhile, Apollo was quoted as saying that the market had been liberalised, with both the NNPC and other marketers now shopping for refined petroleum products from international refiners.
“The market now is such that both the NNPC and other marketers are on the same level of going to buy from the international market to sell to final consumers,” the GM stated.
He said all qualified marketers who approached the agency and had the competence to import petrol were cleared for such operations.
Apollo also noted that the agency had been working with the Central Bank of Nigeria to make foreign exchange available to marketers for petrol imports.
He said, “Both major marketers and others who have the competence to bring in products have been given QMs to do so. However, there are yardsticks that should be met before any marketer can bring in products.
“Also, the PPPRA is doing its best to liaise with the CBN to ensure that marketers are not discriminated against. They too should have access to forex as much as the NNPC. So they should have a level playing ground.”
When asked if the PPPRA had allowed marketers to determine the price of PMS based on the competitive market situation currently in place, Apollo replied no, it reported.