Fuel marketers and the Trade Union Congress of Nigeria, on Tuesday, expressed their opposition to a provision in the Senate version of the Petroleum Industry Bill that allowed only active refinery licence holders to import petroleum products into the country.
Subsection (8) of section 317 of the bill says the Nigerian Midstream and Downstream Petroleum Regulatory Authority shall apply the backward integration policy in the downstream petroleum sector to encourage investment in local refining.
“To support this, licence to import any product shortfalls shall be assigned only to companies with active local refining licences. Import volume to be allocated between participants based on their respective production in the preceding quarter,” it adds.
The Major Oil Marketers Association of Nigeria and the Depot and Petroleum Products Marketers Association of Nigeria noted in a joint statement that the clause restricted the licence to import all refined products into the country to a very small number of local refiners.
They said, “This restriction extends to products that have long been deregulated such as diesel, kerosene (household kerosene and aviation turbine kerosene), Liquefied Petroleum Gas and base oils.
“As industry stakeholders and professionals with heavy investments in the downstream sector, we welcome the entry and participation of local refineries. We believe that local refining ultimately benefits Nigerians and our economy.”
The marketers commended the government’s plan to repair all existing refineries in a bid to boost refining capacity.
The associations, however, said, “Our members wish to strongly advise caution with this provision that allows only refiners to hold import licences for refined products for the following reasons:
“It poses a monopoly risk that must be avoided. It is imperative that a level playing field is set for all operators across the value chain. Anti-competition and monopolistic overtures and breaches must be avoided.”
According to the marketers, any provision that does not guarantee a free and open market will give room to price inefficiencies and eventually kill off small businesses in the downstream sector.
The marketers added, “Allowing imports by major players across the supply chain will protect consumers by ensuring that local pump prices are not higher than regional or international prices.
“MOMAN and DAPPMAN remain committed to the sustainability and institutionalisation of a viable downstream petroleum industry for the social and economic growth of Nigeria.”
The TUC also condemned the planned move to limit the importation of petroleum products to few operators in the oil and gas industry, describing it as ‘monopolistic and a deliberate attempt to frustrate the challenges the PIB is intended to solve’.
“The market should be left open if the government truly wants to be sincere in addressing the problem of the sector,” it said in a statement.
The TUC President, Mr Quadri Olaleye, and the Secretary General, Mr Musa-Lawal Ozigi, said the country could not afford to continue toying with the oil and gas sector as it remains the only major source of foreign exchange.
The statement said, “The labour chiefs are surprised, dismayed and irritated by the conspiracy to waste another opportunity to fix the sector, noting that from the lawmakers’ position and body language, one could infer they are serving the interest of some few individuals to the detriment of the over 97 per cent of the country’s population but the congress will not allow that to happen.
“The labour leaders urge the lawmakers to rise up and provide true leadership instead of serving the interest of few capitalists. It is high time ‘these principalities and powers’ removed their knees from the neck of Nigeria and Nigerians.”