Oil marketers have questioned Nigerian National Petroleum Company Limited’s dominance in petrol importation, claiming that it violates the Petroleum Industry Act.
According to The Punch, this was said at the press conference held in Lagos following the 2023 Expo of the Oil Trading Logistics Africa Downstream Energy Week.
According to the CEO of 11 Plc and Chairman of Oil Trading Logistics, Tunji Oyebanji, NNPCL was encouraging unhealthy competition, which the PIA forbade, as it was the only downstream firm providing petrol to the entire country.
“Petroleum prices continue to be disconnected from actual market dynamics. Throughout the value chain, there ought to be healthy competition, but the NNPCL monopoly has made all of this impossible,” the speaker claimed.
According to Oyebanji, the primary cause of independent marketers’ incapacity to import petrol was their inability to obtain foreign exchange at a rate that was competitive with the NNPCL.
“Not all oil marketers can get foreign exchange at a reasonable price. The same regulations apply to NNPC as they do to other downstream businesses. However, since it sells crude oil, NNPC currently has access to foreign exchange, whereas we do not.
“As a result, you find a situation where the NNPCL still controls the market share of others. For example, if I request 100 trucks of petrol and only receive 5, the NNPC has already established my market share. Furthermore, this is detrimental to the sector and not competition,” he insisted.
The Executive Vice Chairman of OTL, Dr. Emeka Akabogu, spoke in favour of stakeholder cooperation.
He believed that industry stakeholders working together would improve the downstream sector’s fortunes.
He went on to say that while the PIA had supported the deregulation of the downstream industry and the removal of subsidies, the timing was off.
“Removing subsidies on May 29 was wrong because the Federal Government was floating the naira at the time and crude prices were high on the international market.” The exchange rate was between 400–500/$1 prior to May 29.
But if we decide to adopt the PIA, petrol should be selling for N1,000 per litre after subsidies were removed,” he said.
Additionally, the Executive Secretary of the Major Oil Marketers Association of Nigeria, Clement Isong, said that FG established a channel through which merchants could obtain dollars at the official exchange rate.
Isong stated that in this way, consumers would be able to fully reap the benefits of the removal of fuel subsidies.