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The Independent Petroleum Marketers Association of Nigeria (IPMAN) has rejected a proposal by the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) that the downstream oil sector regulator should make it mandatory that fuel prices should be reviewed after six months.
PETROAN had proposed that regulatory authorities establish mechanisms to encourage petrol price stability for at least six months. This approach, according to PETROAN, would help reduce the uncertainty and risk associated with investments in the sector, ultimately promoting economic development and protecting the interests of consumers and Nigerians.
However, the National Vice President of IPMAN, Hammed Fashola, disagreed with the proposal. Fashola stated that the factors determining fuel prices are the crude oil and the exchange rate, wondering how PETROAN expects fuel prices to remain the same for six months if the naira appreciates significantly against the dollar.
Fashola explained that deregulation brings competition, and that’s what many people don’t know. He stated that everyone wants to sell, and it will open the market for investors to come in. According to Fashola, the six-month petrol price stability idea is not possible, and nobody will implement that.
Vice President, Hammed Fashola disclosed that the government is trying to give importers and refiners a level playing field to operate in the downstream oil sector. He stated that both importers and refiners will compete, and this will give Nigerians cheaper fuel at the pumps while discouraging monopolistic tendencies.
Fashola cited the example of the Dangote refinery, which started selling petrol at a lower price, forcing others to follow suit. He stated that petrol was above N1,000 when the Dangote refinery started, but now it is N860 per litre. According to Fashola, that’s the beauty of deregulation.
In conclusion, the rejection of PETROAN’s proposal by IPMAN is a significant development in the downstream oil sector. The deregulation of the sector has brought competition, and IPMAN believes that this is the best way to ensure that Nigerians get cheaper fuel at the pumps.