Richard Ginika Izuora
The Major Oil Marketers of Nigeria, MOMAN, has said that frequent instability in supply and distribution of Premium Motor Spirit, PMS, also called petrol across the country clearly shows institutional failure occasioned by inability of the system to absorb the subsidy regime.
MOMAN in a statement yesterday observed that having subsidized PMS for so long, Nigerian institutions now have a diminished capacity to deal with the
current local energy crisis, adding that any disruption in any part of the supply chain causes ripple effects and results in queues at stations.
“As a country, we must begin the process of price deregulation to reduce this inefficient subsidy. If the country wishes to implement a subsidy, it must be in areas targeted to help those it should help such as in agriculture and transportation to reduce food price inflation and generate more jobs for Nigerians.” he Association said.
In addition it said that in tandem, the authorities must find a way to liberalize supply and also bring transparency and competition into supply to ensure steadier, more efficient supply at optimum prices.
According to MOMAN, Imported products must compete with locally refined products to find a meeting point between the need for local refining and competitively low but cost recovered prices for Nigerians for sustainability.
The Association said the the dialogue with the Nigerian people needs to begin to identify, negotiate and agree these areas and begin implementation to save the downstream industry which has been in degradation freefall due to a
lack of investment to maintain, renew and grow assets and facilities such as refineries, pipelines, depots, trucks, and modern filling stations.
These lack of investments it said has contributed in no small measure to fuel
distribution inefficiencies and high costs.
“Neither the new refineries nor the refurbished refineries will survive with the refining margins at current pump prices. The exploration, production, refining of crude oil and the distribution of refined products is an international business with ebbs and flows and has specific models, guidelines, rules, and norms designed to protect and sustain consumers of this type of energy and populations impacted by its supply
chain.
The Government and the industry in Nigeria must demonstrably apply these accepted health, safety, environmental protection, and quality norms to be seen to care for its local populations.” it said.
To cut corners would be irresponsible, unaccountable, and unsustainable, it warned and assured that members would continue to work with other key stakeholders to ensure that we ramp up supplies to our retail sites and return to normalcy as soon as possible.
“We envisage a rise in demand during the yuletide season and are prepared to work round the clock to keep our stations running. As always, MOMAN a full deregulation of the petroleum downstream sector in phases to cushion the effects of the impact of a sharp rise in PMS prices on the long-suffering, hardworking citizens of Nigeria.” it said.
Also, speaking at a Webinar organised by the MOMAN, for the media in Lagos yesterday, James Gooder, VP Crude & African markets, Argus, leading independent Price Reporting Agencies (PRAs), projected that January of 2023 may see extreme clean freight volatility in advance of February 5 ban.
Gooder however, said market is likely to rebalance as the year progresses and main wild cards are played and High freight, especially on Long Range and Medium Range tankers are likely to persist through the first half of 2023.
