Oil marketers have urged the Federal Government to implement full deregulation of the downstream sector of the petroleum industry to attract investments.
The Executive Secretary of Major Oil Marketers Association of Nigeria, MOMAN, Mr. Clement Isong said in an interview that full deregulation would Nigeria derive maximum benefit from its crude oil resources.
According to him, “Full deregulation is not just good for my members, it is good for Nigeria, it is good for the country because when you do not deregulate, you go back to subsidy and subsidy is a very poor way of managing the country’s resources”.
He noted that refining in-country would allow Nigeria benefits more than the $50 per barrel it earns from the export of crude oil, especially with the take off of the Africa Continental Free Trade Agreement, AfCFTA.
“We want full deregulation. Government needs to find the best way of educating Nigerians until we can arrive because that is the silver bullet. With AfCFTA, what deregulation does is that it enables refineries to take roots. All the Dangote refinery, the BUA refinery and all the modular refineries came because you said you are going to deregulate.
“If you deregulate, those refineries will set up, then the next thing that will happen is, coming from those refineries, all the petrol and diesel that you are buying from abroad, you will start refining at home, so you are beneficiating your crude at home.
“So, apart from the fact that you will make enough refined products to cater for your market, you will have excess which you would now be exporting and earning foreign exchange at a far higher value to Nigerians”, he added.
He blamed lack of foreign exchange for keeping away private sector operators from importing petrol into the country.
He noted: “The major problem is foreign exchange. There is no foreign exchange availability and even NNPC when they bring in products; they bring it through a facility called DSDP, Direct Sale Direct Purchase.
“It means they are swapping crude directly for refined products, so there is just no foreign exchange for people to import at the correct exchange rate.
“For instance, for fully deregulated products, foreign exchange is available, and diesel and kerosene are imported but it is available not at the same rate but for PMS the PPPRA, Petroleum Products Pricing Regulatory Agency, calculates foreign exchange at CBN rate and that window is illiquid. There is no foreign exchange there. It means if you bring in product based on that foreign exchange rate, you cannot sell the product in the market”, he explained.
Also speaking, National President of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Chinedu Okoronkwo said marketers were ready to be involved in fuel importation if forex is made available to them at the rate available to NNPC.
Okoronkwo noted that making forex available at the same rate would create a level playing field for marketers and also create healthy competition.
“It will no more be a one man show like it is right now. I believe government is thinking in that direction as a short term measure pending when most of the new refineries will be up and running. Which is not going to be far”, he stated.