Senate’s PIB Version To Return Monopoly, Stiffle Investment-  Marketers, Depot Operators 

Senate's PIB restricts petroleum products import to refinery owners

Yemisi Izuora

Another round of monopoly and investment apathy is being anticipated in Nigeria’s downstream subsector of the oil and gas following what industry operators consider as secret insertion of certain clauses in the Petroleum Industry Bill, PIB by the Senate.

In a collective response the Major Oil Marketers Association of Nigeria, MOMAN and Depot and Product Marketers Association on Nigeria, DAPPMAN, warned that the provision posed a monopoly risk that must be avoided.

In a joint statement signed by Chief Executive Officer of MOMAN Clement Isong and Executive Secretary of DAPPMAN,  Olufemi Adewole, the marketers advised that it is imperative that a level playing field is set for all operators across the valuechain.

Specifically, the marketers observed that the clause restricts the license to import all refined products into the country to a very small number of local refiners.

This restriction extends to products that have long been deregulated such as Diesel, Kerosene (HHK and ATK) ,Liquefied Petroleum Gas,  LPG and Base Oils.

Though they as industry stakeholders and professionals with heavy investments in the downstream sector, they applauded the entry and participation of local refineries, but urged that anti-competition and monopolistic overtures and breaches must be avoided.

“We believe that local refining ultimately benefits Nigerians and our economy. We also commend the Government’s plan to repair all existing refineries boosting refining capacity., they said.

The marketers strongly cautioned that such  provision that allows only refiners to

hold import licenses for refined products does not guarantee a free and open market and will will give room to price inefficiencies and eventually kill off small businesses in the downstream sector.

They also averred that the provision will stifle price competition and leave pricing to be solely dictated by a few local refiners, adding that if Nigerians are to pay higher international prices at the pump, they should also benefit when the prices go down internationally.

This they argued will not be guaranteed under the suggested provision unless there is healthy competition.

In their opinion price must be kept competitive at the pump for the benefit of the average Nigerian whose income is constantly being eroded by inflation.

“Allowing imports by major players across the supply chain will protect consumers by ensuring that local pump prices are not higher than regional or international prices.

“MOMAN and DAPPMAN remain committed to the sustainability and institutionalization of a

viable downstream petroleum industry for the social and economic growth of Nigeria.” they said.

Add Comment