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By Udeme Akpan, Energy Editor

Despite the regulation of the nation’s downstream sector, oil marketers, yesterday, continued to sell petrol at different prices, due to the high price of diesel.

Investigation by Vanguard showed that while a few major oil marketers sold the product for N165 per litre, some majors and their independent counterparts, sold for between N170 and N200 per litre, depending on location.

However, in a telephone interview with Vanguard yesterday, National Operation Controller, Independent Petroleum Marketers Association of Nigeria, IPMAN, Mr. Mike Osatuyi, who defended the development, said it would not be possible for his members to sell the product at the government regulated price of N165 per litre.

He said: “We cannot guarantee to deliver the product at N165 per litre because our members spent about N800 per litre to buy diesel, which they use in fueling the tankers used in petrol distribution. The cost is huge, depending on volume and distance covered.

“The oil marketers have to do this; otherwise there would be no supply to many parts of the country. Already, we have been able to eliminate the long fuel queues in Abuja, Lagos and some other parts of the nation.”

Market distortions

Reacting to the development, the National President, Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said: “This and other issues constitute unnecessary distortions that could have been avoided if the sector was fully deregulated.

He also said: “It brings confusion for the government to continue to regulate the market, while also allowing elements of deregulation to thrive or flourish. In other words, the government remains the sole importer of the product. It is also the same government that permits oil marketers to charge higher prices to cover the cost of diesel.”

We stand on complete deregulation — MOMAN

In any case, the Major Oil Marketers Association of Nigeria, MOMAN, have called for full deregulation of the downstream sector, where prices would be determined by the forces of demand and supply.

The Chairman of MOMAN, Mr. Olumide Adeosun, said: “MOMAN appreciates the challenges the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA and NNPC face in making the product available,despite the restrictive supply environment, extremely high international products costs and the almost insurmountable international logistics challenges occasioned by the unavailability of diesel and its ubiquitous place in the supply chain.

“Having subsidized petrol for so long, Nigerian institutions now have a diminished capacity to deal with the current international energy crisis. If the country had spent monies spent on subsidies on education, health and infrastructure, Nigerians and Nigerian businesses would have been better equipped to face today’s energy challenges.

“However, better late than never. MOMAN believes that Nigeria needs to gradually reduce the subsidy of PMS while investing and perhaps subsidizing mass transportation and productive activities in such areas such as agriculture.

“Everyone has a role to play. We must all reduce consumption and find other ways to weather the current energy crisis as no Government can make this painless. Predictably, as a country, we shall be faced by the choice of queues and unavailability of products or increases in price at the right pace to make product available.”

Implement PIA  — Experts

Also, in another telephone interview with Vanguard, yesterday, an Energy analyst, Dr. Bala Zakka, called for implementation of the Petroleum Industry Act, PIA, a comprehensive reform that was targeted at restructuring, regulating and achieving a more transparency and accountability in the industry.“

Similarly, the Lead promoter, EnergyHub Nigeria, Dr Felix Amieyeofori, said the government, apparently the sole importer of petrol would also incur additional cost through the massive importation of the product, adding that a bulk of what is imported is smuggled to other countries, thus constituting a huge loss to the nation.

“High oil prices will continue to increase the government funding of petrol importation. It also means huge subsidy burden. But the sad reality is that a bulk of what is imported into Nigeria finds its way to other nations in West Africa. This means that the government subsidy is partly meant for other nations than citizens.”

The entire process where the government plays a domineering influence can be abused. Besides, it also discourages the private sector from investing their funds in the downstream sector, thus denying us domestic growth. The situation might not change for good in the short and medium term as the present administration seems committed to executing the 2023 elections. There is a great need for deregulation and implementation of the petroleum Industry Act.”