“Petrol to Sell for N1,000/Litre”: Marketers Raise Concern Over NNPC’s Monopoly as FX Scarcity Bites
- Oil marketers have said NNPC's dominance in the downstream sector is against the PIA
- They complained of not being able to access Forex to import petrol like the NNPC
- They said that the industry is still not in the right place despite PIA passage because of the wrong timing
Oil marketers have said that the Nigerian National Petroleum Company (NNPC) Limited's dominance in petrol importation violates the Petroleum Industry Act.
They made this known at the post-conference press briefing of the 2023 Expo of the Oil Trading Logistics Africa Downstream Energy Week recently held in Lagos.
Source: UGC
Monopoly promotes unhealthy competition
Tunji Oyebanji, Chairman of Oil Trading Logistics and CEO of 11 Plc, said the monopoly of the NNPC as the supplier in the downstream sector promotes unhealthy competition.
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As contained in a Punch report, he said independent marketers have been unable to import petrol due to the inability to access forex exchange at a competitive rate like the NNPC.
According to him, the NNPC is supposed to play by the same rules as other downstream companies.
He said:
So, you see a situation where NNPCL still dictates the market share others have, because if I, for instance, ask for 100 trucks of petrol, and I get 5, then, my market share has been automatically determined by the NNPC. And this is not competition and is unhealthy for the industry.
Dr Emeka Akabogu, the Executive Vice Chairman of OTL, also said that all stakeholders' collaboration would help improve the downstream sector.
He noted that the deregulation of the downstream sector and removal of fuel subsidy, as advocated by the PIA, was wrongly timed.
Even though it took Nigeria almost 20 years to achieve passage of the PIA, he said that the industry is still not in the right place.
Akabogu posited that removing the subsidy on May 29 was wrong. He noted that crude prices at the international market were high, adding that the Federal Government floated the naira at the time.
He said:
Before May 29, the exchange rate was around 400-500/$1. However, after subsidies were removed, if we decide to implement the PIA, petrol should be selling for N1,000 per litre.
Analysts agreed that deregulation would help to improve the space. Samuel Oyekanmi, a financial analyst, noted that more work, however, needs to be done to make this work.
According to Oyekanmi, the recent downstream oil sector deregulation appears like an area that would improve the level of transparency and, by extension activities in the downstream oil sector.
He, however, added:
There is still a lot to be done in terms of oil extraction and refining before we will still impressive growth in the oil sector.
Meanwhile, the NNPC earlier announced that it had successfully secured $3 billion in crude-for-cash funding from the African Export-Import Bank (Afreximbank).
NNPC makes senior management team changes, announces 3 new appointments
The NNPC Limited earlier announced three changes to its senior management team, Legit.ng reported
This was disclosed in a statement signed by Garba Deen Muhammad, the Chief Corporate Communications Officer of the Company.
According to the statement released on Saturday, September 16, 2023, NNPC's three Executive Vice Presidents due to retire in 2024 have been asked to leave immediately.
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Source: Legit.ng
