Marketers, refiners urge complete removal of subsidies

• Published On: 12 September 2024 at 18:44

In a significant industry development, Nigeria's petroleum marketers, refiners, and depot owners have called for complete deregulation of the country's downstream oil industry.

This move is intended to eliminate government-imposed price controls and subsidies.

According to The Punch, the Major Energies Marketers Association of Nigeria, the Depot and Petroleum Products Marketers Association of Nigeria, the Crude Oil Refiners Association of Nigeria, the African Refiners and Distributors Association, and the Petroleum Products Retail Outlets Owners Association of Nigeria all expressed their views during a webinar on Wednesday.

The 'Optimising the Nigerian Oil and Gas Industry' discussion brought together key stakeholders to discuss sector challenges, opportunities, and strategies for improving efficiency and sustainability.

According to MEMAN's communique, the participants discussed the impact of recent petroleum price increases and emphasised the critical need for market deregulation to foster a more stable and competitive environment.

"A market-based pricing mechanism was proposed to increase competitiveness and operational efficiency. The removal of government price controls was viewed as critical to creating a more dynamic and responsive industry.

"The demand for complete deregulation and market liberalisation was reiterated. The advantages include increased efficiency, product availability, and private sector participation," the communique stated.

There was a strong emphasis on helping local refineries reduce reliance on imported petroleum products.

The stakeholders emphasised the importance of marketers being able to source crude oil from both domestic and international suppliers, as well as refineries entering into direct processing agreements with retail companies.

They also emphasised the importance of switching to cleaner energy sources, such as compressed natural gas (CNG) and liquefied petroleum gas.

In addition, the participants proposed establishing a new committee structure for the petroleum sector, modelled after Nigeria's Bankers' Committee, to improve governance and collaboration.

They stated that this structure would include a Midstream and Downstream Industry Coordination Committee, chaired by the CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, to focus on improving collaboration within these sectors.

They advocated for the formation of an Industry Interface Committee to improve coordination between the upstream and downstream sectors.

They also proposed the formation of a Petroleum Industry Consultative Assembly, which would bring together stakeholders from various oil and gas sectors.

This assembly, chaired by the Minister of State for Petroleum Resources (Oil), aims to improve collaborative decision-making and industry governance.

"These committees seek to foster collaboration, ensure regulatory compliance, facilitate conflict resolution, and provide strategic oversight, similar to the role of the bankers' committee in the banking sector.

"The creation of industry-wide consultative committees was suggested to enhance collaboration, innovation, and conflict resolution, addressing supply chain inefficiencies and infrastructure deficits was deemed crucial for long-term sustainability," according to the release.