The Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), says it has commenced the process of licensing additional oil marketers to begin importation of petrol.
The Chief Executive of NMDPRA, Mr. Farouk Ahmed disclosed this wednesday in Abuja after meeting with the marketers at the agency’s headquarters, saying the agency would not allow businessmen operating in the downstream exploit Nigerians even in a deregulated market.
The move, aimed at breaking the monopoly of the Nigerian National Petroleum Company Limited (NNPC) would expand the market and as more entities are allowed to import products, prices of petrol would likely fall due to competition, given that operations do not engage in price fixing.
His words: “Like I said, the market is open already. We have to follow the regulations. So we will put out policies that are user-friendly. Some of them (oil marketers) have already started putting their applications in because we don’t want to create a gap.
“NNPC is slowing down on their importation, so we need to have someone closing up the gap that NNPC is creating so that we don’t have a shortage in the country.”
“But NNPC being a responsible organisation, is also monitoring what other replacements they have, so we agree that NNPC will continue to import until such a time when we have a critical mass of other importers.
Ahmed noted that as the NNPC starts slowing down on importation in deference to the Federal Competition and Consumer Protection Council (FCCPC) regulation which prohibits one entity or individual from controlling more than 30 percent of the market, there was a need to fill the gap being created by the new development.
He added: “The licences, we are processing them. Some or about two to three marketers already came to us last week to say that they have already booked cargoes to come in July. So, these are some of the very interesting things that we have received propositions for, which are very interesting and we are fast-tracking the licenses to make sure they import.
“We are interacting with the NNPC every day to ensure that the market is well supplied and there’s no gap in importation,” he stated.
On the availability of foreign exchange (FX) for importation, Ahmed stated that since the market had been deregulated, marketers could begin to source for FX where it is available without resort to the government.
“For FX, the market is deregulated, so, I don’t believe we should subsidise our FX or that they should go to the Central Bank of Nigeria (CBN). The price that NNPC rolled out which they sell now, took cognisance of the exchange rate, not at the NNPC rate.
“So, if exchange rate is N650 to a dollar, if the naira improves, the price will change, so it can go either way,” he argued.