The decision by the Federal Government not go ahead with the removal of fuel subsidy by next June ending has disrupted plans by petroleum products markets on the development of the downstream sector of the petroleum industry, the Major Oil Marketers Association of Nigeria (MOMAN) has said.
MOMAN is the umbrella body for all major oil and gas marketing companies operating in the country, Including 11 Plc., Conoil Plc., Ardova Plc., MRS Oil Nigeria Plc., OVH Energy Marketing Limited, Total Nigeria Plc. and NNPC Retail.
Reacting to the recent announcement by the Minister of Finance, Budget and National Planning, Zainab Ahmed, to suspend for about 18 months that plan earlier to remove the subsidy on petrol in July 2022, Chairman of MOMAN, Olumide Adeosun, lamented that the decision has disrupted the plans by its members on the development of the downstream sector.
He told reporters in Lagos on Monday that the Association was currently holding consultations with the Ministry of Petroleum Resources and other industry stakeholders, including the industry regulatory agency on the suspension.
”The members of the association are currently consulting with the Ministry of Petroleum Resources, the Nigerian Midstream and Downstream Petroleum Regulatory Authority and other industry stakeholders on the new direction to go,” Adeosun said.
“The consultation is to enable us understand exactly how this decision would impact the other provisions in the Petroleum Industry Act (PIA) as well as market operations generally. Our understanding was that the reforms contained in the PIA were a combination of several decades of engagements with internal and external stakeholders, covering local and international best practices to encourage investments in the petroleum downstream sector particularly on optimizing costs, ensuring transparency, and upgrading industry assets and infrastructure, like refineries, fuel depots, pipelines, trucks, and filling stations,” he said.
With the suspension of the fuel subsidy removal, which could have ended government involvement in fixing prices, and allowing market fundamentals to determine prices of petroleum products, Adeosun said MOMAN does not seem to understanding the philosophy and regulations that would henceforth guide the business during the 18-month period.
He said the consultation by the Association with the Ministry and the regulatory authority was to get an idea about the direction the business would be going, to ensure uninterrupted supply of petroleum products, transparency, and the contribution of the marketers.