Business - Business & Economy - News - Oil & Gas - July 13, 2021

PIB: Major oil marketers, depot owners criticize proposed restriction of fuel import licenses to local refiners


The Major Oil Marketers Association of Nigeria (MOMAN) and the Depot and Petroleum Products Marketing Association of Nigeria (DAPPMAN) on Tuesday criticized the proposal in the Senate version of the Petroleum Industry Bill (PIB) restricting the issuance of fuel import licenses to only local refinery owners.
The position of the Associations was contained in a joint statement signed by the Executive Secretary and Chief Executive of  MOMAN, Clement Isong and his counterpart in DAPPMAN Olufemi Adewole.
The Associations said as major interest groups and professionals with heavy investments in the downstream sector of the petroleum industry, their members should be allowed to also benefit when fuel prices go down in the international market, by being given the right to join in importation of petroleum products.
Specifically, MOMAN and DAPPMAN said the clause introduced late into the draft PIB in the Senate version restricts the license to import all refined petroleum products into the country to “a very small number of local refiners.”
The marketers said the restriction extended to petroleum products that have long been deregulated, namely dual purpose kerosine (DPK), or diesel; household kerosine (HHK), or kerosene and aviation turbine kerosine (ATK), liquefied petroleum gas (LPG) and Base Oils.
“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 the country’s refining capacity.
“Our members wish to strongly advise caution with this provision that allows only refiners to hold import licenses for refined petroleum products,” the marketers said.
The restriction, the marketers noted, would pose a monopoly risk that should be avoided, adding that it was an imperative for a level playing field
for all operators across the value chain.
Besides, they said anti-competition and monopolistic overtures and breaches must also be avoided.
“Any provision (in the PIB) 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 of the petroleum industry.
“This provision will stifle price competition and leave pricing to be solely dictated bya
few local refiners.
“If Nigerians are to pay higher international fuel prices at the pump, we should also benefit when the prices go down internationally–this is not guaranteed unless there is a healthy competition”, the marketers said.
The marketers noted that fuel price must be kept competitive at the pump for the benefit of the average Nigerian whose income was constantly being eroded by inflation.
Allowing imports by major players across the supply chain, the marketers said, would protect consumers by ensuring
that local pump prices of petroleum products are not higher than regional or international fuel prices.
They reiterated their commitment to the sustainability and institutionalization of a viable downstream petroleum industry for the socio-economic economic growth of the country.

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