Stakeholders in Nigeria’s midstream and downstream sectors have urged the Federal Government to address key challenges and outline strategies for a sustainable future in the petroleum downstream sector.
The appeal was made during a virtual online workshop with the theme “Deregulation of the Nigerian downstream sector: The day after,” organized by the Nigerian Petroleum Downstream Industry in collaboration with the African Refiners and Distributors Association (ARDA) held in Lagos.
The Authority Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory (NMDPRA), Farouk Ahmed, set the tone for the workshop with a goodwill message stating that the Authority shall allow free market pricing once the sector was fully deregulated.
The Executive Director, DSSRI NMDPRA, Ogbugo Ukoha and the Director, Policy Coordination, NPA Ghana were on hand to give insights on the role of the regulator in pricing, safe operation and enforcement in their presentations at the workshop whilst the Managing Director, CITAC Africa, Mr Gary Still touched on market liberalization or elimination of subsidies.
The ES, ARDA, Anibor Kragha shed light on product specifications – ARDA roadmap, regional initiatives (AU / ECOWAS). DAPPMAN, IPMAN, PETROAN, NARTO and MOMAN shared their perspectives on risk management, best practices, and market expectations.
Alhaji Lawal Yusuf Othman, National President of the Nigerian Association of Road Transport Owners (NARTO), in his presentation, warned that the full deregulation of the downstream sector and complete removal of petrol subsidy will introduce a mix of opportunities and challenges into the operating environment.
The ES of DAPPMAN harped on sharing best practices. Mr Gary Still, MD of CITAC Africa, in his presentation explained that market liberalization means the removal of government subsidies and price controls on crude oil products, and allowing market forces to determine the price and supply of petroleum products.
National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Elder Chinedu Okoronkwo, who was represented by Mr Mike Osatuyi, IPMAN’s National Operations Controller, revealed that the marketers are in full support of the government’s plan to embark on full deregulation of the downstream sector.
He warned Nigerians to prepare to pay up to N750 for every litre of petrol after the full implementation of the subsidy removal, adding that the pump price is likely to drop to around N500 if the Government encourages the Central Bank of Nigeria (CBN) to provide forex to marketers at the official rate.
Osatuyi also urged the government to channel savings from subsidy provisions to provide palliatives to the masses. He charged the government to be alert and sensitive to resentment from Nigerians.
Industry stakeholders at the workshop called on the government to implement appropriate palliatives in the form of public transportation, freight of agricultural produce, ensure transparent and effective communication, improve access to foreign exchange, and trade finance, guarantee strategic stock, and provide access to crude oil for refineries ahead of the plan to embark on the total removal of petrol subsidy.
The workshop offered the industry regulator and all players across the midstream and downstream value chain the opportunity to deliberate on measures that needed to be put in place ahead of the full implementation of the Petroleum Industry Act (PIA) in Nigeria.
