Operators decry deregulation without local refining
Operators in the oil and gas industry have called on the Federal Government to prioritise investment in domestic refining of petroleum products.
While commending President Bola Ahmed Tinubu for removing fuel subsidy, operators lamented that the inability to refine products locally is not sustainable, considering the vagaries of international market prices for petroleum products and the nation’s weak currency against the US dollar.
Speaking on the sidelines of the inaugural importation of Premium Motor Spirit (PMS) into Nigeria by Emadeb Energy Services Limited, post-subsidy removal regime, the Chief Executive Officer, Emadeb Energy Services Limited, Adebowale Olujimi, also called on the government to create a special window for petroleum marketers to easily access foreign exchange strictly for importation of PMS, saying that it would go a long way to alleviate the sufferings of the masses.
“If the government can help to find a window where the issue of dollars is resolved for us to have a fixed market rate to bring these products in without any condition, it would go a long way to ease the sufferings of Nigerians.
“We are a responsible company and we know that people cannot do without moving from one place to the other and PMS is key for us to do that. For us, we are not profiteers, but business people and at the same time, we are a very considerate set of people and we would not sit and watch Nigerians suffer,” he added.
Meanwhile, representing the Chief Executive Officer, NMDPRA, Farouk Ahmed, the Executive Director, Corporate Services and Administration (NMDPRA), Sadiq Bashir, explained that the significance of the event was to show that deregulation has been embraced, while subsidy removal has become a thing of the past.
According to him, the move is also a clear demonstration of the importance of working together as stakeholders in the industry to diversify the supply of petroleum products in the country.
“Emadeb has shown that it is doable and it is a business model that can be successfully implemented in the country. The regulation is not about pricing, but also about opening up the market. What we are doing at NMDPRA is ensuring that first of all, we guarantee supply by licensing people to import the products where necessary, or in the case of licensing, refining companies downstream to make sure that this product is produced in the country,” he said.
“We also ensure quality to make sure that what the people are getting is of the right quality and also the quantity delivered to them is what it should be. We have a major role to play going forward and we have a good team working with the industry stakeholders to ensure that,” he stressed.
Olujimi, however, commended the Tinubu-led administration for the fuel subsidy removal, maintaining that deregulation is the way forward.
“As a trading and marketing company, we know that strategically, we need to position ourselves because this is what we have been calling for, deregulation is the way forward, so we decided to be one of the early callers in today’s game and we have always looked at this as a way forward. The value of this cargo here is over $17 million. FX today is at ₦835 to a dollar. So we decided that we need to start something and before now, NNPC had been the dominant market supplier and we felt we should do it in another way by running our business without depending on NNPC,” he stated.
Also speaking, the General Secretary, Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Comrade Afolabi Olawale, added that deregulation has helped to open up the market while commending Emadeb for taking the bold step to bring in the first product into Nigeria as a private entity.
“The most important thing for us is that before now, we have been engaging the government for almost two decades that deregulation should be based on local production. Prices went up because the vagaries of the international market cannot be determined solely by the Nigerian government, so what we are saying is that since this market has been deregulated, there is space for investors to invest in refining so that we have local refining.
“Today, we are happy for Emadeb Group, but we are pained in the heart as organised labour that local refining should be the way forward if we plan to deregulate, but notwithstanding, the market is open and anybody that is interested can do business here and would not be regulated, so hopefully we should have more marketers bring in more products for us to have engendering competition which will help us prevent profiteering and at the same time, people will come into the country while private investors would also invest in refining,” he averred.
On his part, the National Operations Controller, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mike Osatuyi, said the era of monopoly by Nigeria National Petroleum Company Limited (NNPCL) is gone, applauding Emadeb for the giant stride achieved for being the first member to bring in petroleum products despite all the challenges involved in importing petroleum products into the country.
“We are happy that Emadeb has taken this bold step to bring in this vessel post subsidy regime which is a giant stride. This is what we have been clamouring for decades and we are in support of what Emadeb has done by being the first member to bring in petroleum products despite all the problems associated with bringing in petroleum products in the country.
“The era of monopoly of NNPC has gone, so we are going to witness very competitive operations in fairness in pricing, best services to customers because you can now pay your money in the morning or afternoon and load your products without unnecessary delay which used to happen in the past with NNPC,” he said.
The Vice Chairman, Depot and Petroleum Products Marketers Association of Nigeria (DAPMAN), Mamood Tukur, said the association had always campaigned for deregulation, pointing out that the Petroleum Industry Act (PIA) was passed, but deregulation was not implemented prior to the announcement of Mr. President
“We are delighted to see deregulation working and we can only assure Nigerians that marketers and businessmen are not profiteers. Today prices have gone up, but tomorrow prices will go down. Nigeria was at the edge of falling apart, because subsidy was killing this country, it would be short-term pain, but for long-term gains. We had to stop mortgaging the future of Nigeria, so subsidy removal is the best thing for this country and we must embrace it. There would be a lot of hardship coming, but eventually for this country this is the best way forward,” he added.
