Lagos — Members of Major Oil Marketers Association of Nigeria, MOMAN and Depot and Petroleum Products Marketers Association of Nigeria, DAPPMAN, have called for caution on the late insertion in the Senate version of the Petroleum Industry , PIB on import license.
The associations in a joint statement made available to our correspondent disclosed that the clause on licence to import all refined products limits participation to a very small number of local refiners, nothing that it poses a monopoly risk that must be avoided.
According the bill, the association stated that the restriction extends to products that have long been deregulated such as Diesel, Kerosene (HHK and ATK), LPG and Base Oils.
“As industry stakeholders and professionals with heavy investments in the downstream sector, we welcome the entry and participation of local refineries.
“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.
“Our members wish to strongly advise caution with this provision that allows only refiners to hold import licenses for refined products for the following reasons: it poses a monopoly risk that must be avoided. It is imperative that a level playing field is set for all operators across the value chain. Anti-competition and monopolistic overtures and breaches must be avoided.
“Any provision that does not guarantee a free and open market will give room to price inefficiencies and eventually kill off small businesses in the downstream sector.
“This provision will stifle price competition and leave pricing to be solely dictated by a few local refiners. If Nigerians are to pay higher international prices at the pump, we should also benefit when the prices go down internationally–this is not guaranteed unless there is healthy competition.”
MOMAN and DAPPMAN believed that price must be kept competitive at the pump for the benefit of the average Nigerian whose income is constantly being eroded by inflation.
They also opined that 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 institutionalisation of a viable downstream petroleum industry for the social and economic growth of Nigeria,” the statement reads