The federal government should consider a full deregulation of the downstream sector of the petroleum industry without further delay, fuel depot owners have proposed.
The depot owners under the platform of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) said this will enhance the growth of the industry and the development of the economy.
The association made the proposal in a statement on Sunday by its Chairman, Winifred Akpani, who is also the Managing Director/Chief Executive Officer of Northwest Petroleum and Gas Company Limited.
The proposal is coming just as the federal government said the deregulation policy has already yielded some benefits to the economy.
DAPPMAN, which noted the government’s consistent effort to reposition the sector for effectiveness and profitability, said its members have resolved to support the implementation of a fully deregulated downstream petroleum sector.
Ms Akpani said full deregulation would ensure seamless business and enhance transparency, competitiveness and sustainable growth.
“DAPPMAN is mindful of the commitment of the government and the functional organs managing the sector to ensure value to every Nigerian.
“We salute the government for this as we continue to face up to uncertain times. However, we believe that full deregulation of the sector remains the most viable option for Nigeria to effectively navigate this period and ultimately safeguard the future of our economy and wellbeing of 200 million Nigerians” she said.
Deregulation, she noted, would open up the sector for fresh investments, deepen the market, ensure diversification and expansion, culminating in stable demand and supply of petroleum products.
Noting the issues affecting deregulation policy over the years, DAPPMAN expressed the hope it would guarantees long-term benefits.
It said this would empower the government to commit savings from the deregulation process into infrastructure development, job creation, agricultural revolution, education and health.
Also, it said deregulation would spur growth of Small and Medium scale Enterprises (SMEs) as well as large corporate organisations towards increasing Nigeria’s human capacity index, competitiveness and ultimately drive inflow of foreign investments.
On COVID-19 pandemic, Mrs Akpan said DAPPMAN, towards the upgrade of medical facilities, distributed tens of thousands of masks and sanitisers and donated relief materials to thousands of beneficiaries nationwide.
End of fuel subsidy
On April 7 this year, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari announced the removal of fuel subsidy from the petroleum products pricing template in the country.
Mr Kyari said the decision meant the takeoff of the policy of deregulation in the downstream sector of the petroleum industry.
Under the deregulation policy, Mr Kyari explained, the government, through the Petroleum Products Pricing Regulatory Agency (PPPRA), would cease to fix and regulate the price fuel in the country.
He said the policy meant the private sector would take over the petroleum products market to allow the government face its traditional role as industry regulator.
Making further clarifications, the Minister of State for Petroleum Resources, Timipre Sylva, SAID DEREGULATION WOULD INVLOVE A FUEL PRICE MODULATION MECHANISM to determine fuel prices.
The minister said a special committee would monitor the market fundamentals, including cost of foreign exchange, bank interest rate by importers of petroleum products, to provide a monthly price advisory to fuel marketers.
Mr Sylva said the committee would include all the players in fuel market, including the Major Oil Marketers Association of Nigeria, Depot and Petroleum Products Marketers Association of Nigeria, Independent and Petroleum Marketers Association of Nigeria.
Benefits of deregulation
Last Thursday, during a special briefing on deregulation in Abuja, Mr Sylva said apart from over N1 trillion saved since the fuel subsidy removal, the deregulation policy has opened up the sector for other benefits and investment opportunities.
He said the deregulation policy would help the country address its fuel refining problem, as more investors would be attracted to investing in building refineries.
Increased refining capacity, the minister said, would end fuel importation, and help the country stop huge foreign exchange losses as well as create jobs.
Other benefits, he said, include an opportunity for investors in alternative sources of fuel, like the compressed natural gas (CNG) and liquefied petroleum gas (LPG) to drive the National Gas Expansion Programme (NGEP).