LAGOS – Former Chief Operating Officer, Upstream of Nigerian National Petroleum Corporation, Alhaji Bello Rabiu, has advocated the need for a review of the current business model and institutional arrangements of the deregulation policy which has enabled one dominant player (NNPC) power to import and fix the prices of PMS across the nation.
This, he said, the development is not in line with the provisions of PIA 2021 which envisages the participation of multiple players operating under open competitive environment with multiple supply sources from import and domestic refineries under a level playing field aimed at delivering products at lowest possible prices at the pump.
He spoke at the Quarterly Press Engagement organised by the Major Energy Marketers Association of Nigeria (MEMAN) recently.
He added: “Under the current model, no one knows the actual cost of importing a litre of PMS into the Nigerian market except NNPC. NMDPRA no longer publish the pricing template to enable the citizens know the official landing cost of any product Ex-Lagos since the announcement of full price deregulation and total removal of PMS subsidies”.
This situation, according to him, has resulted in total lack of accountability and substantial revenue leakages that cannot be quantified due to lack of transparency in the process.
He said: “If we can be told what Customs duty is daily in Nigeria, we should be equally told how much is the fuel being imported”
“For example NNPC insists there is no more subsidy in the pricing of PMS, but the difference between the AGO and PMS open market prices clearly shows some elements of subsidies or hidden cost recovery in the open market prices of PMS across the nation” he stated.
He expressed optimism for a thriving PMS market account of the birth of Dangote Refinery, saying the facility would soon become a major supplier of petroleum products, adding that there must be regulatory intervention to ensure smooth entry of Dangote Refinery into the supply chain.
He maintained that the Immersion of Dangote Refinery in the downstream petroleum sector is a game-changer in the journey towards full deregulation, adding that government needs to intervene to ensure a level-playing field in collaboration with all stakeholders is the most critical next step.
He said: “All hands should therefore be on deck to ensure the attainment of a transparent, competitive, efficient and sustainable liberalized downstream petroleum sector in our country, Nigeria,” he stated.
Also speaking, Founder and Chief Consultant, B. Adedipe Associates Limited, AbiodunAdedipe said there are frustration in the value chain due to unavailability of feed stock for local refineries, particularly Dangote Refinery which has the capacity to meet Nigeria’s fuel needs.
According to him, the crude must be refined locally, the products should be available in sufficient quantity and Nigeria should provide a level playing ground for all players in the market.”
He added that the government should ensure there is transparency in the system and allow competition to come into play, while ensuring that there is no monopoly in importation and domestic production.
He implored all stakeholders in the value chain to take responsibility for their roles.
Read the full article here
