From Uche Usim, Abuja
The Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) have raised the alarm over a late insertion of a clause into the Senate version of the Petroleum Industry Bill (PIB), that makes only local refiners like Dangote eligible for importation of products. The two unions say that such a development was dangerous as it reeks of injurious monopoly.
In a statement dated July 13, 2021 and jointly signed by the Executive Secretary of MOMAN, Clement Isong and the Executive Secretary of DAPPMAN, Olufemi Adewole, the two unions frowned at the legislative insertion, insisting that any provision 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.
“Specifically, the clause restricts the license to import all refined products into the country to a very small number of local refiners. This restriction extends to products that have long been deregulated such as Diesel, Kerosene (HHK and ATK), 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 refining capacity.
“Our members wish to strongly advise caution with this provision that allows only refiners to hold import licenses for refined products because it poses a monopoly risk that must be avoided. It is imperative that a level playing field is set for all operators across the value chain. Anti-competition and monopolistic overtures and breaches must be avoided”, the unions maintained.
They added that the provision will stifle price competition and leave pricing to be solely dictated by a few local refiners.
“If Nigerians are to pay higher international prices at the pump, we should also benefit when the prices go down internationally – this is not guaranteed unless there is healthy competition.
“We position that price must be kept competitive at the pump for the benefit of the average Nigerian whose income is constantly being eroded by inflation.
Allowing imports by major players across the supply chain will protect consumers by ensuring that local pump prices are not higher than regional or international prices”, they added