The major energies marketers association of Nigeria, MEMAN has called for robust petroleum policy document to drive a strong refining sub-sector which the association said is key for the future of Nigeria’s downstream sector.
This position was made during a webinar presentation by executive secretary of the association, clement isong on wednesday while speaking on the intent of the petroleum policy in his introductory remarks during his paper presentation titled, “Market context and local refineries protection”.
Isong in his presentation said the petroleum policy document basically seeks to develop a strong refining sub-sector which allows for significant private sector participation in the downstream. Isong who noted that the document also moves to address possible impediments that may likely pose danger to private sector penetration in the refining sub-sector said the petroleum policy document also aims to ensure robust and competitive local refining industry, that ensures local product availability, product export, and feedstock availability to related industries.
On the proposed 15% import tariff on premium motor spirit, and diesel, Isong while acknowledging the mixed reactions that currently trail the new tariff policy said the stance of some advocates who argue that the 15% tariff would raise the imported product costs and allow local refineries recover costs and margins to a large extent remain valid.
In his breakdown, the executive secretary said a 15% tariff in today’s landing cost will add 122.46 naira to PMS,(from 827.24 naira to 949.70 naira thereby pushing pump prices to about 998 naira per litre within the lagos axis, and 1,028 naira per litre in many other parts of the Nigerian markets, with diesel rising roughly to 1,164 to 1,194 naira per litre depending on margins.
On her part, tanya stepanova while delivering her paper titled, “Navigating transformation: lessons from global markets for Nigeria’s energy future” during the webinar said the coming of the dangote refinery has brought a new shift to the nation’s petroleum downstream, a development she noted has helped drove down fuel imports into Nigeria in recent months. Stepanove while also acknowledging Nigeria’s market growth potentials amidst projections of a population increase with about 126 million by the year 2050 said the future of the Nigerian downstream sector remains bright while responding to one of the questions posed to all speakers in their closing remarks at the webinar.
Drawing experiences from the liberalisation policy in Ghana, another speaker who gave insights on support mechanisms put in place in that country to help liberalization efforts said the different measures which include indicative maximum pump price, pump price floor, OMC daily price reporting amongst other measures are all designed to maximise value for the sector. The pump price floor for instance he said aims to prevent unfair market practice such as predatory pricing to ensure fair competition.
