Experts seek end to oil monopoly, call for transparency
By Waliat Musa
The landing cost of Premium Motor Spirit (PMS) also known as petrol has risen to a staggering N1,117 per litre using the official Investors & Exporters (I&E) forex window.
The Major Energies Marketers Association of Nigeria (MEMAN) disclosed this yesterday during its quarterly press webinar, adding that the product costs were obtained from independent energy price benchmarks providers, as at July 16, 2024.
This has further widened the gap in the subsidy paid by government by over N500 per litre to float the pump price of petrol at the official rate of N620.
At the black market rate of N1,500 per dollar, findings showed that the landing cost of petrol, which includes the product’s international price, shipping, insurance, and other charges increased to N978/litre from N720/litre in October 2023.
But with the naira depreciating against the United States dollar in the official forex market to about N1,600 despite the Central Bank’s recent intervention, the new landing cost of petrol has spiked to N1,117 per litre.
The NNPC, which is the sole importer of petrol, has consistently denied subsidising the cost of PMS but refused to disclose the landing cost of the product.
MEMAN’s disclosure is almost the first from a marketer as the landing cost appeared to have been shrouded in secrecy by PMS importers. MEMAN’s Executive Secretary, Clement Isong, said the costs were obtained from independent energy price benchmark providers, promised that the association would henceforth provide similar information regularly to keep the public updated.
Stressing that it is committed to promoting transparency, compliance, and fair practices in the industry, MEMAN promised public transparency in landing costs of products in the industry.
Independent consultant and former Chief Operating Officer, Upstream, NNPC, Bello Rabiu, raised concern about the issue of monopoly in the oil and gas sector as it determines the pump price of the product. He stressed that full deregulation of the sector is not limited to the removal of subsidy, noting that NNPCL is the dominant player and the sole supplier of PMS in Nigeria.
Corroborating Rabiu’s view, founder and Chief Consultant of B.A Dedipe Associates Limited (BAA Consult), Dr Biodun Adedipe, said the regulators should provide a level playing ground for all participants in the market.
Proffering solutions to the issue of reducing PMS pressure supply, Adedipe said the industry should refine locally sufficient products to reverse the importation of fuel and lubricants as there is installed refining capacity sufficient to meet local demand and also export products.
An energy analyst at the Lagos-based Centre for Development Studies, Aisha Mohammed, said the product is being partially subsidised by the government for political, social and economic reasons.
“All of us who were saying that they should remove the subsidy, we can see that they have partially removed it now, but look at the consequences. Economically, it will sound good, but socially and politically, it is very costly,” Mohammed said.
