IPMAN accuses FG of monopolistic deregulation of downstream sector

Admin l Wednesday, December 23, 2020

 

LAGOS, Nigeria – The National Operations Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr Mike Osatuyi  has said there is need for Federal Government  to enforce  total deregulation of the petroleum downstream sector than engaging in monopolistic deregulation.

Osatuyi made the disclosure against the backdrop of government inability to allow market force determine the petroleum pump price in the country. Osatuyi said government through the Nigerian National Petroleum Corporation (NNPC) has been the sole importers of petrol and operating crude for refined white product under the name of Direct Supply  Direct Purchase (DSDP)which negates the  principle of market deregulation of the sector.

According to him, government monopolising importation of petrol has negated the principle of equal participation and level playing field in the business.

“There is need for government to allow other players into the market to import  petrol by making FOREX available at CBN official rate as promised severally by the Honourable Minister of State for Petroleum, His Excellency, Mr Timipreye Silva. The Federal Government should make forex available to oil marketers for import so as to  drive down petrol price now that crude price is at $52 for brent and $49.5 for WTI per barrel.

“The Federal Government has announced plans to make foreign exchange available to petroleum product marketers but we are waiting  to be called upon to deliberate on the modalities involved. Government should make foreign exchange available to petroleum product marketers, like IPMAN, MOMAN and DAPPMAN, in order to make the importation of petrol into the country competitive, reduce the rising cost of the product, and stop the overdependence on the Nigerian National Petroleum Corporation (NNPC) for its importation and pricing”, he said.

Osatuyi, who is also the National Deputy President,(South) Indigenous Gas Traders Association of Nigeria, (INGASAN), said availability of forex to oil marketers would stop the current monopoly in the importation of petrol by NNPC, who has been the major importer of petrol over the years with other players in the downstream oil business buying the product from them. Osatuyi said  government announced full deregulation of PMS (petrol)in march 2020 but we witnessed  price band control up to August 2020.

“From September, the price band control was withdrawn  with the hope that full deregulation will surface but what we have been experiencing now is monopolistic deregulations”, he said.

According to  him, Monopolistic deregulation is a system where the deregulation mechanism  and the field is monopolized to only one or few selected player.

” NNPC is the only player  allowed to access forex for importation  of petrol in addition to the  crude  for petrol handed down to few players in the industry. Government and NNPC  are the only parties that can explain the type of deregulation we are practicing in Nigeria.

“Government  should allow all players to participate  in the deregulation  processes so that we can bring private sector efficiency  to the system which will  bring down the price,” Osatuyi added. Osatuyi, commended President Buhari administration  on the gas policy launched in  January 2020 and particularly the launching of auto gas programme  for the country.

” Apart from reducing or total stoppage of gas importation into the country, the seriousness of the Federal Government  on  gas expansion programme will create jobs  through  the production and supply chain mechanism. Gas will be cheaper for Nigerians . It will serve as alternative means of powering of our vehicles through  usage of compressed natural gas (CNG).

“Liquefied Petrol Gas (LPG) will also serve as power for our generator which will make power cost be cheaper if price of crude  oil goes up to  $80 per barrel”.