The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has reiterated its plea for a more competitive downstream petroleum sector, urging the federal government to promptly restore petrol import licences. This move, according to the association, is crucial for stabilizing fuel prices and securing the nation's energy supply.
PETROAN's stance aligns with recent observations from the World Bank, which cautioned that supply limitations and a lack of robust competition in Nigeria's downstream oil market could exacerbate inflationary pressures if not addressed swiftly.
In a statement released in Abuja, Joseph Obele, the national spokesman for PETROAN, conveyed that the organisation's National President, Billy Gillis- Harry, highlighted how the call for reinstating import licences supports the group's long-held position favouring a liberalized market structure.
Gillis-Harry emphasized that competition is the most effective strategy for controlling fuel costs, boosting operational efficiency, and ensuring consistent product availability across the country.
He pointed out that the World Bank had noted the restrictive competition in the downstream segment as a contributing factor to escalating petrol prices, with current pump rates reportedly surpassing import parity.
The association further warned that persistent supply rigidity, coupled with rising global crude oil prices, poses a significant risk of worsening inflation throughout the economy.
Gillis-Harry argued that permitting a broader range of importers into the market would diversify supply channels, prevent monopolistic practices, and shield consumers from unfair pricing.
He also suggested that the current pricing challenges could have been better managed if Nigeria's state-owned refineries were either fully functional or had undergone proper privatisation.
The PETROAN president asserted that achieving sustainable competition in the downstream sector requires not only the resumption of fuel imports but also the complete privatisation or commercial restructuring of the federal government's refineries in Port Harcourt, Warri, and Kaduna.
He drew a parallel with the telecommunications industry, where liberalisation led to the emergence of operators like MTN Nigeria and Airtel Nigeria, resulting in enhanced service delivery, wider access, and reduced costs for consumers, suggesting similar positive outcomes could be achieved in the petroleum sector.
PETROAN clarified that promoting competition does not diminish the importance of local refining capacity. Instead, it aims to support market stability while domestic production capacity is being enhanced. The association acknowledged the Dangote Petroleum Refinery as a significant private sector investment and a key milestone for Nigeria's industrial advancement.
However, PETROAN cautioned against market consolidation, stressing that long- term sustainability hinges on policies that encourage multiple investors and prevent any single entity from dominating the market.
The association's recommendations include the immediate reintroduction of petrol import licences, the privatisation or commercial restructuring of government-owned refineries, and the swift commencement of operations at the Port Harcourt refinery.
Furthermore, they called for the establishment of a truly deregulated market environment, supported by stringent regulatory oversight to guarantee fair pricing and prevent anti-competitive behaviours.
"In light of the foregoing, PETROAN presents the following recommendations to the federal government, NMDPRA, and the Nigerian National Petroleum Company Limited (NNPC): Immediate reinstatement of petrol import licences to encourage multiple supply sources, deepen competition, and stabilise pump prices. Full privatisation or commercial restructuring of government-owned refineries to ensure efficiency, transparency, and optimal performance.
"Commencement of production activities at Port Harcourt Refinery. Creation of a truly deregulated and competitive market environment with clear regulatory oversight that prevents monopolies and promotes fair pricing across the value chain," the statement outlined.
PETROAN reaffirmed its dedication to collaborating with the government and other stakeholders to build a petroleum distribution system that is transparent, resilient, and competitive, capable of contributing to economic stability and national development.
By Emmanuel Addeh and Peter Uzoho
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