Oil marketers under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) said the new law passed by the national assembly that allows only owners of refinery licences to import petrol poses avoidable monopoly risks for Nigeria’s petroleum sector.
The oil marketers insist that the new Petroleum Industry Bill (PIB) would create a protective environment for Nigerian local-based refineries by restricting the importation of all petroleum products: including diesel, aviation fuel, lubricants, base oil – products that are already deregulated to only operators with refinery licenses.
“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,” MOMAN and DAPPMAN said in a joint statement on Tuesday.
They noted that 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.
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“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,” oil marketers said.
They noted that 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,” Oil marketers said.
The Senate and the House of Representatives last Thursday set up conference committees to harmonise both versions of the PIB. The committees are expected to meet today while the harmonised version is also expected to be passed by both chambers before the lawmakers proceed on their yearly break.
This development is coming 50 years after Nigeria joined the Organisation of the Petroleum Exporting Countries (OPEC), raising concerns about the country’s fiscal environment.
