Petrol Marketers Complain About Supply Monopolies as Subsidies Increase

 Even as they acknowledged that subsidies had crept in as a result of the government's intervention, petrol merchants have expressed their disapproval of the monopoly in the delivery of the product into the country.

According to them, under the terms of the Petroleum Industry Act (PIA), the Nigerian National Petroleum Company Limited (NNPC) Limited shouldn't be the only importer of petrol into the nation.

Tunji Oyebanji, MD/CEO of 11 Plc, stated on Thursday at the annual conference of the Association of Energy Correspondents of Nigeria in Lagos, "First and foremost, we need to get out of the bottleneck we have created for ourselves, in which the NNPC is the sole importer of fuel into Nigeria."

.The monopoly of the NNPC must be destroyed, according to Oyebanji, a former head of the Major Oil Marketers Association of Nigeria (MOMAN). "The country's monopoly of a single supplier needs to be broken up because it is ineffective and unsustainable."

The withdrawal of the gasoline subsidy was announced by President Bola Tinubu on May 29. As a result, the price of gasoline at the pump rose from N186 per litre to above N500. In July, the cost was raised once more, reaching N617.

The monopoly of the NNPC must be destroyed, according to Oyebanji, a former head of the Major Oil Marketers Association of Nigeria (MOMAN). "The country's monopoly of a single supplier needs to be broken up because it is ineffective and unsustainable."

The withdrawal of the gasoline subsidy was announced by President Bola Tinubu on May 29. As a result, the price of gasoline at the pump rose from N186 per litre to above N500. In July, the cost was raised once more, reaching N617.

It was anticipated that the elimination of subsidies would encourage private marketers to join the NNPC in importing petrol, especially in light of the foreign exchange reform that resulted in a severe devaluation of the naira in mid-June. One or two operators brought the commodity in, but marketers' attempts to import it were hampered by the government's assurance that pump prices would not rise further despite growing international oil costs and the depreciation of the naira.

"In order to increase competition and efficiency, we must find ways to attract new participants to the importation industry. The entire logistical chain must then be examined, according to Oyebanji.

There may only be three or four facilities available now that can accommodate ships up to 120,000 metric tonnes. We will bring larger vessels into the country if we have more of those kinds of facilities, he continued.

He advised the regulators to take caution not to do anything that might violate the PIA.

He asserts that the PIA has concluded that oil prices must be set or determined by market forces. It is extremely evident that this is the law.

The petrol product's price has not changed since the last pump price rise in July. Despite this, the price of diesel at the pump has increased to over N1,000 from between N640 and N700 in July due to the surge in global oil prices.

Tinubu promised Nigerians in August that the cost of petrol at the pump would not rise anywhere in the nation.

"Does subsidies still exist? During a panel discussion during the event, Clement Isong, executive secretary of MOMAN, remarked, "I will say yes, in some regions. The subsidies in its previous form must never be reinstated.

While the government can step in, he said, the action needs to be precise and time-limited.

He claimed that as a result of the increasing pricing, both consumers and business owners need become more cost-effective in order to compete in the market.

"Nigeria would have collapsed if the pump price of petrol had remained at N185 per litre today with the current global oil prices," Isong claimed. The subsidy is now significantly lower than it once was, but modifications are still necessary for us to reach our goals.

The changes, according to him, will affect operational and infrastructural investments. This will affect working capital and funding costs, and we still need to make local expenditures in public health awareness and safety.