Financial Energy Review
……..by Ben Ndubuwa…….
Major Oil Marketers Association of Nigeria (MOMAN) has reiterated that there is a lot of products offshore but the challenge is bringing it onshore. And to overcome this challenge, they list factors disrupting the supply chain, among which include lack of capacity and the need to build up capacity by buying more trucks, having more bigger on land storage or have more product in the tank inland.
MOMAN said that once they are able to get this right and work optimally with the Nigeria National Petroleum Company Limited (NNPC) there will be no disruption in the supply chain.
The major marketers also pointed out that subsidy on Premium Motor Spirit (PMS) otherwise known as Petrol has further stifled investment in the downstream sector causing infrastructure deficit. As a result they are appealing to the Federal Government to consider a phased full deregulation of downstream sector.
MOMAN Chairman, Mr Olumide Adeosun while speaking at an online training for journalists organised by the marketers yesterday in Lagos. said the proposed phased full deregulation of the downstream is important to cushion the effects of the impact of the sharp rise in fuel prices on the hardworking citizens of Nigeria.
Adeosun also said that MOMAN would continue to work with other key stakeholders, to ensure that it ramp up supplies to retail sites and return to normalcy as soon as possible.
He added, “We envisage a rise in demand during the yuletide season and we are prepared to work round the clock to keep our stations running.”
Adeosun also said there was need for the country to begin the process of price deregulation to reduce the inefficient subsidy
“If the country wishes to implement a subsidy, it must be in areas targeted to help those it should help. Such areas are 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 steady and 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.
“The dialogue with the Nigerian people needs to begin to identify, negotiate and agree these areas and begin implementation to save the downstream industry.
“The industry has been in degradation free fall due to a lack of investment to maintain, renew and grow assets and facilities such as refineries, pipelines, depots, trucks and modern filling stations,” he said.
According to him, these lack of investments contribute 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 chairman said the exploration, production, refining of crude oil and the distribution of refined products are international businesses with ebbs and flows.
According to him, they have specific models, guidelines, rules and norms designed to protect and sustain consumers of this type of energy and populations impacted by its supply chain.
He advised that the government and the industry in Nigeria must demonstrably apply these accepted health, safety, environmental protection and quality norms to be seen to care for its local populations.
In his remarks, Executive Secretary of MOMAN, Mr Clement Isong, apologised to Nigerians over the lingering fuel crisis, adding that his members are desirous of cushion its debilitating effects on Nigerians.
He said that there is abundant fuel offshore, but lamented that Nigerians could not have access to same on account of logistic issues.
According to him, there is need for massive investment in infrastructure to put the country’s downstream sector in good shape.
