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Our investments under threat, oil marketers lament NNPC’s monopoly

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Our investments under threat oil marketers lament NNPCs monopoly

Palpable fear has gripped major oil marketers that their multi-billion Naira investments in the downstream sector are increasingly coming under intense threat over Nigerian government’s inability to grant them licenses to resume importation of Premium Motor Spirit (PMS), popularly called petrol

Among the major headaches of the aggrieved marketers is the current fuel importation monopoly being enjoyed by the Nigerian National Petroleum Corporation (NNPC) which has continued for the last two years and which they claimed was putting most of their investments in the downstream sector in harms way.

The oil marketers who spoke o Daily Sun said that although they have always supported the Federal Government’s policy of downstream deregulation, they are however miffed that the NNPC has remained the sole importer of white products for the entire nation, stressing it was high time the issue was reviewed to allow the private sector, especially the major marketers to activate their huge investment in the sector.

According to them, deregulation would allow market forces to determine the price of petrol as against the price-fixing module of the Federal Government, through the Petroleum Products Pricing Regulatory Agency (PPPRA).

Since 2017, the NNPC has remained the sole importer of petrol into the country after major and independent oil marketers backed out the importation of the commodity due to crude oil price fluctuations, inability to source foreign exchange at the official exchange rate and huge subsidy debts.

Commenting on the development, the Chairman, Major Oil Marketers Association of Nigeria (MOMAN), Mr Adetunji Oyebanji, said the challenge of forex scarcity and fluctuations in crude oil price remained a setback to fuel importation by marketers. “We want market forces to determine fuel price and so there should be a level playing field. Everybody should have access to foreign exchange to be able to import and sell petrol at a pump price after taking its landing and distribution costs into consideration.’’

Only recently the Managing Director, OVH Energy, Mr. Huub Stokman, in an interview with Daily Sun, said petrol at the moment is a regulated product which at current prices is not feasible for marketers to import as the current price structure does not allow big investments.

‘‘On petrol, we need to know that at the current pump price only NNPC could import on behalf of all marketers and the country as a whole,’’

Under the current global oil price regime of over $60 per barrel, it would be practically impossible for oil marketers to import and sell at a regulated price of N162/N165 per litre, except for the NNPC which auguments petrol with N72 per litre.

In 2020, marketers had suspended the importation of petrol over their inability to source forex at the official exchange rate of N306 per dollar. The suspension had forced the NNPC to assume full responsibility for the importation of petrol.

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