Petroleum products marketers kick against importation licence restrictions

Factual Pursuit of Truth for Progress


Marketers of Petroleum products in the country have opposed the restriction of licence to import products to only owners of refineries.

According to them, the restriction is contained in the draft of the Petroleum Industry Bill that was passed by the Senate on July 1.

The Depots and Petroleum Products Marketers Association (DAPPMAN) made the disclosure in a statement issued by Olufemi Adewole, Executive Secretary of the Group and Clement Isong, Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN) on Tuesday.

The marketers argued 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).

It stated, “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 production in the preceding quarter.”

The duo noted that the restriction extended to products like diesel, kerosene, liquefied petroleum gas and base oils that had long been deregulated.

“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 added.

The groups’ opposition to the clause is based on the premise that it posed monopoly risk that must be avoided.

They believe 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 added.


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