The Major Oil Marketers Association of Nigeria (MOMAN) has called for the commencement of gradual deregulation of the downstream oil and gas sector to reflect the current price of petroleum products. MOMAN that with the escalating energy costs occasioned by the Russia-Ukraine conflict, no country or authority has control of how the cost of energy can be priced.
Speaking at a virtual meeting with the Federal Competition and Consumer Protection Commission [FCCPC], and the media yesterday, Chairman of MOMAN Olumide Adeosun, said the impact of the conflict is having an immense effect on businesses in Nigeria, which is largely a consumer country with inactive refining capacity.
MOMAN had earlier called for a review of the present arrangement that leaves the nation dependent on a single supplier for petrol supply. Adeosun stated that the price of diesel would have been lower today, but attributed the hike to the inaccessibility of foreign exchange at the official rate. He said marketers source forex from the parallel market at N620 a dollar but even at that diesel cost in Nigeria is about $1.20 a litre as against $1.24 a litre in Kenya.
He said as a country, Nigeria should begin to develop initiatives that will help reduce energy consumption especially as the government cannot sustain escalating subsidy bills.
This he said is because other countries are adopting measures like closing borders to export which is indirectly locking Nigeria out of the market, while others are passing the cost to consumers. “Our subsidy bill is outrageous and we have had a prolonged subsidy regime without saving for the rainy day and this has reduced capacities to deal with the impact.
“We want phased deregulation. The landing cost of the product, the high cost of diesel to bridge products across about 500 kilometres, or run of our stations is enormous, and all of these add up to the cost of doing business and cannot guarantee N165 a litre approved pump price of petrol.
“The other option is for businesses to shut down but I think it is better to have a gradual price adjustment to sustain businesses or cripple the economy totally,” he said. Consultant to FCCPC, Ikem Isiekwena, in his remarks restated the Commission’s commitment to ensure the protection of petroleum products consumers as enshrined under the FCCPA.
Isiekwena, said the Commission, does not have adequate information about diesel price differentials as it sells in other countries.
He said if its surveillance reveals such disparity, it would engage marketers but however noted that the product has been deregulated under the law.
He also, said the Commission, has been engaging with relevant agencies in the energy sector including the power industry where it said it is bent on punishing offenders, especially operators that fail to comply with extant rules and regulations in the electricity industry without further delay.
WRITTEN BY: FEMI ADEKOYA FOR THE GUARDIAN
IMAGE: BLOOMBERG.COM
