The Major Oil Marketers Association of Nigeria (MOMAN) has accused the Nigerian federal institutions of lacking the capacity to deal with the energy crises epitomized by perennial crude oil theft and fuel scarcity in the country.
At an online workshop yesterday, which focused on concepts of deregulation and petrol subsidy, MOMAN presented a paper noting that a disruption in any part of the supply chain causes ripple effects and results in queues at filling stations. As a result, they argued, the failure of one institution affects the effectiveness of another.
Chairman of MOMAN, Mr. Olumide Adeosun also said Nigeria must begin the process of price deregulation to reduce the inefficient subsidy payment on petrol.
According to the group, if the country wished to implement a subsidy, it must be in the areas targeted to help critical sectors of the economy like agriculture and transportation.
“Having subsidised PMS for so long, Nigerian institutions now have a diminished capacity to deal with the current local energy crisis. A disruption in any part of the supply chain causes ripple effects and results in queues at stations.
“As a country, we must begin the process of price deregulation to reduce this inefficient subsidy. If the country wishes to implement a subsidy, it must be in areas targeted to help those it should help such as in agriculture and transportation to reduce food price inflation and generate more jobs for Nigerians.
“In tandem, we must find a way to liberalise supply. We must bring transparency and competition into supply to ensure steadier, more efficient supply at optimum prices. Imported products must compete with locally refined products to find a meeting point between the need for local refining and competitively low but cost recovered prices for Nigerians for sustainability,” MOMAN said
The group encouraged the federal government to dialogue with the people on ways to save the downstream industry, which they said had been in, “degradation freefall due to a lack of investment to maintain, renew and grow assets and facilities such as refineries, pipelines, depots, trucks, and modern filling stations.”
MOMAN said the absence of investments has contributed in no small measure to fuel distribution inefficiencies and high costs. “Neither the new refineries nor the refurbished refineries will survive with the refining margins at current pump prices,” the group said
The major oil marketers further explained that exploration, production, refining of crude oil and the distribution of refined products were all under an international business, with ebbs and flows.
It maintained that such business has specific models, guidelines, rules, and norms designed to protect and sustain consumers of such type of energy and populations impacted by its supply chain.
“As always, MOMAN advocates a full deregulation of the petroleum downstream sector in phases to cushion the effects of the impact of a sharp rise in PMS prices on the long-suffering, hardworking citizens of Nigeria,” the group noted.