Oil marketers urge Tinubu to remove obstacles, promote competition
By Jeph Ajobaju, Chief Copy Editor
Oil marketers have urged Bola Tinubu to remove all hurdles in the downstream sector of the oil industry to ensure full and successful implementation of his first presidential proclamation that fuel “subsidy is gone.”
Marketers listed the obstacles to include a lack of foreign exchange (forex) at the official N600/dollar rate, payment of rates and duties.
From another flank, Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN) Chairman, Winifred Akpani, who has visited Tinubu in Aso Rock, also urged him to
- Reduce all dues and levies to government agencies
- Suspend charges and taxes imposed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA)
- Scrap the 2.5 per cent security deposit for all purchases
- Revise the clause in the Petroleum Industry Act (PIA) 2021 which restricts importation to only companies with active local refining licences and /or proven track records of international crude oil and petroleum products trading
Marketers said their efforts to flood the domestic market with fuel have been frustrated by a lack of forex, warning consumer may not have a choice if there is no importation.
Mike Osatuyi, Independent Petroleum Marketers Association of Nigeria (IPMAN) National Operations Controller, confirmed the ex-depot price of fuel is now N479.50 per litre.
The price of a 33,000 litre-truck has risen from N7.7 million to N21.8 million, he added.
“Oil marketers are also subjected to the payment of more than 10 kinds of illegal levies to local governments, unions, and others,” lamented another source who did not want his name published.
“A tanker driver heading towards the depots should hold at least N100 for settlement otherwise he cannot get to lift the product. These illegal payments amount to extortion, which must be passed down to consumers in one form or another.”
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Market forces promote competition, efficiency
DAPPMAN Chairman Winifred Akpani, who has also visited Tinubu in the Villa, explained “the forces of demand and supply will naturally promote competition and efficiency and prevent price gouging,” per reporting by Vanguard.
“Deregulation will attract further investments in infrastructure and the employment of teeming Nigerian youths. To achieve a steady and strong downstream industry, it is pertinent that the full support of the government is assured.
“We applaud Mr. President’s statement on harmonisation to a single foreign exchange rate.
“This is critical as it will eliminate arbitrage and provide a level playing field in our industry in particular and the Nigerian economy at large. This will also ensure the highest quality of product supply at the best prices.
“Our further humble request is that all dues and levies to government agencies particularly the NPA Plc and NIMASA be reduced to the barest minimum and payable in Naira.
“This will drastically reduce the pressure on our foreign exchange rate, reserves and keep in check the pump price of petrol.
“That all charges and taxes imposed by the regulator, NMDPRA, as stipulated in the PIA 2021 be suspended until we achieve market stability.
“That the 2.5 per cent security deposit requested by NNPC Ltd for all purchases be scrapped as they never overload marketers.
“Revise the clause in the PIA 2021 which restricts importation to only companies with active local refining licences and/or proven track records of international crude oil and petroleum products trading.
“We would add that stability in the petroleum industry will ultimately lead to the much-needed energy transition.
“We anticipate less dependence on fossil fuels which will result in more investment and faster development of gas and electricity as alternative sources of energy.
“We thank you [Tinubu] once again for this opportunity and pray that our beloved nation will experience sustainable growth and economic prosperity under your astute leadership.”
Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) National President, Billy Gillis-Harry, stressed the huge difference to be added by marketers, which will affect businesses.