Understanding the Agitation: Marketers' Calls for Regulation and Stability
Independent marketers, a vital segment of the petroleum distribution chain, have been vocal in their demand for price regulation and greater stability within the market. Organizations like the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) have repeatedly highlighted the need for a predictable pricing framework and consistent energy security. Billy Gillis-Harry, President of PETROAN, has advocated for mechanisms to analyze price fluctuations, ensuring they do not adversely impact the industry, particularly retailers who may purchase fuel at higher prices only to face sudden price reductions by major players like the Dangote refinery. He emphasizes the critical need for transparency and fair pricing practices to prevent exploitation.
Adding to the chorus of concerns, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) recently questioned the current petroleum pricing regime, asserting that marketers are exploiting Nigerians through inflated petrol prices. PENGASSAN insists that the justifiable pump price for Premium Motor Spirit (petrol) should fall within the range of N700 to N750 per litre, significantly lower than current market rates.
The Government's Response: A Forum for Standardization and Solutions
The upcoming summit, organized by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), is a direct response to these concerns. Francis Ogaree, Executive Director of Hydrocarbon Processing Plants, Installation and Transportation Infrastructure at the NMDPRA, confirmed the forum's dates during the recently concluded 24th Nigeria Oil and Gas Energy Week in Abuja. Ogaree stressed the paramount importance of dialogue in establishing a resilient pricing system in the post-subsidy era.
He acknowledged the operational uncertainties facing players in the sector and assured stakeholders that the NMDPRA is actively working towards standardizing pricing and encouraging increased investment in local refining. Speaking at a panel session on "Building a resilient and competitive refining sector," Ogaree highlighted the authority's achievements in its three and a half years of existence, including issuing numerous licenses and addressing critical industry issues. He emphasized that the ongoing work on petrol pricing standardization is a complex process, which the upcoming forum aims to address by allaying fears and establishing clear standards.
Boosting Refining Capacity: A Path to Supply Security
Beyond pricing, the forum will also deliberate on feedstock adequacy and strategies to ensure a stable and secure supply of petroleum products. Ogaree provided an encouraging outlook on Nigeria's refining capacity, revealing that the nation now boasts a total of 10 operational and near-operational refineries. This impressive figure includes the three Nigerian National Petroleum Company (NNPC) refineries, the 650,000 barrels per day (bpd) Dangote refinery, and six modular refineries. He noted that when fully operational, these refineries will collectively require approximately 1,124,000 barrels of crude oil per day to meet their combined capacity.
Furthermore, Ogaree announced that several new refineries, with capacities ranging from 1,000 to 200,000 bpd, are expected to commence operations by 2026. While this expansion in refining capacity is a positive step towards achieving self-sufficiency in petroleum products, Ogaree cautioned that the success of the downstream market ultimately hinges on the consistent availability of crude oil feedstock to serve the growing number of licensed refiners. He expressed candid concern about meeting the demands of the 47 licensed establishments, constructions, and upcoming operations, underscoring the critical need for increased crude oil production to meet future requirements.
The upcoming national stakeholder forum represents a crucial step in addressing the multifaceted challenges within Nigeria's petroleum downstream sector. By bringing together key players, the government aims to foster transparent dialogue, establish fair pricing mechanisms, and solidify the nation's energy security through enhanced local refining capabilities.