Lagos — As stakeholders in join the Nigerian National Petroleum Corporation, NNPC in steps to combat this global pandemic, experts in the downstream petroleum sector said they have a role to play in liberating the economy by saving the government from spending trillions of naira on fuel subsidies.
This was agreed during a webinar on the Nigeria Petroleum Downstream Consultative Summit hosted under the auspices of OTL Africa Downstream, Major Oil Marketers Association of Nigeria, MOMAN, Depot and Petroleum Products Marketers Association of Nigeria, DAPPMAN and Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN held on Thursday.
According to them, money saved from subsidy can be used to grow the economy by investing in infrastructure, educating the next generation of Nigerians and keeping the population healthy.
This in turn will generate revenue for the country, creating an avenue for Nigeria to leave the poverty trap and emerge as the refining hub for West and Central Africa, they said.
Call for full deregulation
Chairman, Major Oil Marketers Association of Nigeria, MOMAN, warned of uncertainties in investments if the federal government does not implement full deregulation of the downstream sector.
According to him, government has to fully deregulate the downstream sector by allowing market forces to determine prices of petroleum products, especially that of Premium Motor Spirit, PMS popularly known as petrol.
He explained that the only way to secure huge investments for the sector is for government to create an environment where investors can recoup their investments as exemplified in the telecommunication sector where competition is encouraged.
“The downstream needs an environment where the market determines prices”, adding that “such would encourage the right kind of investments.”
“It is uncertainties that scare investors and kills investments”, he said.
On recent reports that government has issued licenses to marketers to start resume importation he said, there was never a time marketers were stopped from importing.
“It was the economics that discouraged marketers from importing because we ended up in huge debts. But now, the economics has opened up for re-opening of importation without recourse to subsidy payment,” he said.
Managing Director and Chief Executive Officer of Northwest Petroleum and Gas Company Limited; and Chairman Depot and Petroleum Products Marketers Association of Nigeria, DAPPMAN, Dame Winifred N. Akpani depots owners had been in huge debts as a result of inability to operate for the past two years.
She explained that instead of the N2 per litre profit, depot owners got a mere 2kobo per litre as NNPC became the sole importer of petroleum products, adding that it is either government fully deregulate or depot owners would be forced to close shops, sell their tanks and move on to other businesses.
“Deregulation does not mean consumers will pay more for products, especially now that prices of crude has crashed at the international market,” she said.
According to her, full deregulation allows for healthy competition where depot owners will make profits from and not from consumers as being speculated.
Hajia Amina Maina, Group Chief Operating Officer MRS Holdings Limited said deregulation is long overdue.
She also called for the government to allow for healthy competition among players in downstream sector as this would encourage huge investments.
On his part, National President Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, Dr. Billy S. Gillis-Harry said government needs to put in place the right regulation and policies that will drive the new regime of deregulation.
He called for inputs from stakeholders in such policies.
“Government needs to carry all stakeholders along in formulation of the policies else, there would still be animosity and suspicion here and there”, he said, adding that an atmosphere of suspicion between stakeholders and government would not spell well for the growth of the downstream sector.
Mr. Oyebanji of MOMAN then called on government to enact sanctions against marketers who exploit consumers when eventually all stakeholders have agreed on the terms and conditions of the fully deregulated market.