Orient Energy Review

Downstream Investors In Nigeria Decry Stifling Government Policies

……..diminishing PMS margin, N306 FOREX access, foreign currency denominated Port charges

Nigeria’s downstream oil sector players have complained that investments in the sub-sector are becoming increasingly endangered, given effects of prevailing Federal Government monetary and regulatory policies on business operations in the subsector.  

The players under the auspices of Major Oil Marketers Association of Nigeria (MOMAN), claim that depot owners and other operators in the downstream sector are facing diminishing margin from PMS sales, and that they are encountering great difficulties in accessing foreign exchange at N306 per dollar in the parallel market.

While calling on the Nigerian National Petroleum Corporation (NNPC) to appreciate the challenges facing the sector and support their quest for waivers and concessions from the FG, the association said its members are also no longer in a position to pay foreign currency-denominated charges by the multiple Nigerian port agencies.

At a meeting in Abuja yesterday with top management of the country’s national oil corporation, MOMAN said while it hopes that Nigeria National Petroleum Corporation (NNPC) will appreciate the teething problems facing the subsector, the association will support the programs of the national oil company especially in the area of energy assets security.

MOMAN chairman, Mr Tunji Oyebanji, solicited the support of NNPC in the association’s quest to see the “burning issues” addressed by government, pledging that downstream subsector umbrella body will collaborate with the NNPC in the achievement of its operational and policy objectives.

“We are indeed thankful for considering us as a veritable partner. MOMAN will partner NNPC and all its subsidiaries such as NNPC Retail and Petroleum Products Marketing Company to supply and distribute petroleum products to all motorists,” Mr Oyebanji stated.

In his speech, the group managing director of NNPC, Mallam Melee Kyari, said as part of concerted efforts to guarantee energy security in the country, the corporation intends to partner with the MOMAN in growing the petroleum sector and achieving President Muhammadu Buhari oil sector objectives, including the passage and implementation of the Petroleum Industry Bill (PIB) by the National Assembly.

“Statutorily, the corporation is mandated to work with all relevant industry stakeholders to sustain the growth trajectory of the petroleum industry as well as ensure energy security of the nation,” he said

He affirmed that effective fuel supply and distribution were critical to national growth and energy security, as NNPC, being a national oil company, has an obligation to ensure that petroleum products supply and distribution are carried out unimpeded across the country.

“NNPC must work with MOMAN, security agencies and all other relevant stakeholders for the petroleum sector to thrive.  We will work with MOMAN as a partner of choice and we are ready to intervene in issues that will promote the growth of the industry. By so doing, we will encourage you to continue to grow your investment in the country for the economy to prosper,” the NNPC boss promised    

The GMD said the FG is determined to ensure that the Petroleum Industry Bill (PIB) passed legislative hurdles within the shortest possible framework of time to, among others, reduce the incidences of overlapping roles among agencies of government.

He expressed readiness to collaborate with other agencies to address the issues that are of interest to MOMAN to ensure that its members remain a going concern.