Oil marketers under the aegis of the Petroleum Products Retail Outlet Owners Association of Nigeria have condemned the constant reduction of fuel prices, saying marketers are still counting losses.
Despite deregulation, PETROAN said there is a need for a regulation that will make it mandatory that prices can only be changed after six months.
In a statement by PETROAN Publicity Secretary Joseph Obele, the association also made a u-turn, saying imports should be encouraged to put an end to monopoly.
Recently, the Dangote refinery dropped the price of Premium Motor Spirit (petrol) from N890 per litre to N825 at the gantry.
This forced the Nigerian National Petroleum Company Limited to follow suit by lowering its pump price to N860 per litre.
Speaking about price stability, the association argued that volatile fuel prices can have a ripple effect throughout the economy, impacting transportation costs, food prices, and the overall cost of living, saying sudden spikes in fuel prices can lead to financial strain and uncertainty.
โThe association stressed that the sudden downward review of prices has resulted in massive losses, with those affected counting their losses in billions of naira. This situation poses a significant fear for further investment in the sector, as investors are wary of unpredictable market conditions.
โMoreover, the threat of price fluctuations is affecting the business boom of the sector, which will definitely lead to retrenchment. This will have far-reaching consequences, including job losses and economic instability.
โTo address these challenges, PETROAN proposed that regulatory authorities establish mechanisms to encourage price stability for at least six months. This approach will help reduce the uncertainty and risk associated with investments in the sector, ultimately promoting economic development and protecting the interests of consumers and Nigerians,โ the statement stated..
PETROAN called for a collaborative approach among stakeholders, including government agencies, regulatory bodies, and industry players, to establish mechanisms that promote price stability, including transparent pricing models, effective regulation, and strategic reserves that can be tapped into during times of crisis.
Our correspondent observes that some importers selling petrol at N945 in Lagos have now adjusted their prices, selling below N900. This, it was learnt, has led to losses as the importers sell below their costs.
While emphasising the critical role that the downstream sector plays in the nationโs economy, Obele said the sector is facing challenges like fluctuating prices, market monopolies, and unhealthy competition that can undermine the foundations of the economy and the trust of our citizens.
โAfter due consultation with key stakeholders and players in the petroleum sector, the Petroleum Products Retail Outlets Owners Association of Nigeria has taken a firm stance on promoting healthy competition and controlling price fluctuations in the downstream sector.
โTo this effect, PETROAN advocates the importance of preventing monopolies and ensuring local refineries thrive, given their significant economic benefits to the country,โ he stated.
He highlighted the importance of healthy competition, saying that when competition thrives, it leads to better choices for consumers and ultimately contributes to economic growth.
โPETROAN firmly believes that a competitive downstream sector is not just beneficial but necessary.
โTo achieve this, PETROAN advocates for a multiplicity of supply sources, including Dangote Refinery, NNPC refineries, modular refineries, and imports. This diverse range of sources will foster competition, especially with imports, allowing for comparisons with international market prices and protecting the local market from exploitation.
โWe advocate for policies that dismantle barriers to entry for new players, promote fair practices among existing companies, and ensure that no single entity can dominate the market to the detriment of consumers,โ he added.
The association commended the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Federal Competition and Consumer Protection Commission โfor their efforts in promoting healthy competition.โ
However, the association also urged these regulatory bodies to remain vigilant and prevent unfair competition practices.
To achieve these goals, Obele added that players must advocate for sound policies and regulations that support a competitive and stable market.
This includes establishing clear and fair regulations that govern market practices, and ensuring that all players adhere to the same standards.
PETROAN also called for implementing measures that protect consumers from unfair pricing and practices, ensuring that they have access to quality products at reasonable prices.
The association encouraged investment in infrastructure to support the downstream sector, including refineries, distribution networks, and storage facilities.
โPETROAN is firmly committed to the Petroleum Industry Stakeholders Forum and stands firm to advocating for healthy competition, full liberalisation, and price stability in the downstream sector. We urgently urge NMDPRA to quickly swing into action to ensure fair pricing.
โWe believe that by working together, industry stakeholders, government, and consumers, we can create a vibrant, competitive market that benefits everyone. Let us unite in our efforts to ensure that the downstream sector not only meets the needs of today but also paves the way for a sustainable and prosperous future. Together, we can build an industry that is resilient, competitive, and fair for all,โ the statement concluded. (Punch)
