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Streamlining downstream operations

By Clara Nwachukwu
DESPITE the furore over refined products importation in the country, analysts believe the downstream operations in the Nigeria petroleum sector is now better managed, with series of streamlining of operations.

To begin with, products importation is no longer an all-comers affair, as there are guidelines agreed by all stakeholders.

Parties agreed on the guidelines include marketers – independent or major, depot operators, the Pipelines and Products Marketing Company, PPMC, a subsidiary arm of the Nigerian National Petroleum Corporation, NNPC, in charge of products supply and distribution; the Central Bank of Nigeria, CBN; the Debt Management Office, DMO; the Petroleum Products Price Regulatory Authority, PPPRA, in charge of price regulation.

Guidelines for fuel importation
Some of the agreed guidelines include that participants:
* Must be registered oil marketing company, or if a
*Depot owner must have a tankage of 5,000 metric tonnes,
*Must have retail outlets, or if a
*Trader, must show proof of storage arrangement or throughput with tank farm owners.
Level play
The streamlining of operations has led to appreciable crash in the prices of petroleum products in other geo-political zones in the country such as the North East, South-South and South East, where prices are usually significantly higher than in the South-West and the Federal Capital Territory, Abuja, where price movements are closely watched by the petroleum industry regulators.

The development, thereafter, heralded big support for private investment in the downstream sector, as the strict adherence to the rules, significantly reduced political patronage through which import permits were hitherto subjected to.

Previous arrangements made by successive administrations to ensure a level playing ground in the allocation of products and fuel importation permit were truncated by lack of confidence in the ability of private investors to improve supply and distribution of fuel to remote areas in the country.

Following the entry of private participants particularly in depot operations, price disparities are being reduced significantly among the regions. Besides, there is also a sharp reduction in sharp practices by marketers such as products adulteration, under-dispensing and a host of others, which often led officials of the Department
of Petroleum Resources, DPR to seal up the retail outlets of erring marketers.

Marketers defence
In their defence, some of the fuel marketers claim they had to travel far distances from other regions in the country to the South West, notably, private depots in Lagos and NNPC depots at Mosimi, Ogun State and Ore in Ondo State for their products supply.

In a bid to bridge the distribution gap, Masters Energy decided to build depots in some South-East and South-South and North Central states such as Abia, Anambra, Rivers, Cross-River, Benue and Nasarawa among others.

Spokesperson for Masters Energy, Mr. Emma Iheanacho, said, “We have invested resources and technology as well in the acquisition of new  trucks to flood filling stations across the country with petrol.

Marketers believe that greater efficiency and transparency in NNPC products allocations will attract further investments in the downstream distribution chain and eventually lead to price parity nationwide.


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