Oil marketers on Tuesday rose against limiting the issuance of petroleum products import licences to only owners of refineries.
The restriction is said to be contained in the draft of the Petroleum Industry Bill passed by the Senate on July 1.
The oil marketers said in a statement issued in Lagos that the insertion of the clause in the Bill would create a monopoly that would exploit ordinary Nigerians.
The statement was signed jointly by Mr Olufemi Adewole, Executive Secretary, Depots and Petroleum Products Marketers Association (DAPPMAN) and Mr Clement Isong, Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN).
Section 317(8) in the Senate’s version of the Bill states that licence to import any product shortfalls shall be assigned only to companies with active local refining licences.
The import volume shall be allocated between participants based on their respective products in the preceding quarter.
The two associations noted in the statement that the restriction extended to products like diesel, kerosene, liquefied petroleum gas and base oils that had long been deregulated.
They also noted, however, that “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 our refining capacity,’’ they stated.
They stated also that their opposition to Section 317(8) was based on the premise that it posed a monopoly risk that must be avoided.
The marketers said that it was imperative that a level playing field was set for all operators across the oil and gas value chain.
“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 prices go down internationally,’’ they stated
They argued that this was not guaranteed unless there was healthy competition.
“Prices 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 and 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,’’ they stressed.
The Major Oil Marketers Association of Nigeria was established in 2001 as a MOC, to represent the collective interests of the Nigerian petroleum industry and address the distribution/ allocation challenges amongst petroleum marketers. In August 2006, MOMAN was incorporated as an advancement to standardize the affairs of the MOC.
MOMAN plays a strategic role in the advancement and regulation of industry standards, addressing a range of common issues relating to the distribution and marketing of petroleum products. MOMAN serves as an advocate on behalf of the players in the Nigerian downstream sector, proactively engaging with key stakeholders, providing expert advice and communicating industry views to the government, the public and local media. It also serves as an information hub for all industry related enquiries.
MOMAN’s industry efforts include promoting industry transformation, setting HESQ industry standards, collaborating to reduce supply and logistics costs, developing and exploiting relevant data capture and analysis amongst others.
SOURCE: businessmanmaritimewestafrica.com