Oil Marketers Blame Subsidy for Downstream Infrastructure Decay

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The poor state of infrastructure in petroleum downstream sector has been blamed on years of under-pricing the pump price of premium motor spirit, petrol, through subsidy payment. With government-owned refineries, pipelines and depots in a bad state and not functional, Nigeria has had to depend on importation, and trucking by roads to move petrol across the country.

Speaking to Vanguard in a telephone chat, the Executive Secretary of Major Oil Marketers Association of Nigeria, MOMAN, Mr Clement Isong said he was not surprised that the refineries were not working.

He noted that deregulating the sector fully will benefit the country. He said: “I understand the challenges that price regulation has created over the years, the problem is because we have kept the prices at artificially low for such a long time, we have not achieved what is called price recovery in order to maintain a lot of the infrastructure in the downstream. That is what the challenge is”.

He expressed the hope that the on-going deregulation of the downstream sector would lead to renewal, rehabilitation and revival of “all the infrastructure in the industry”.

On call for the privatization or concenssioning of the refineries, he said: “I think it is an interesting option. In the private sector, we are a lot stricter with our cost”.

He also noted that the Petroleum Industry Bill when passed would help the revival of the downstream and the industry as a whole.

Also speaking, the National President of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Elder Chinedu Okoronkwo, explained that full deregulation of the sector is needed to make the sector sustainable.

He disclosed that IPMAN was in discussion with NNPC on the pump price of petrol, insisting that deregulation allows marketers to sell petrol at the competitive price. On the slight adjustment of pump price from N161 per litre to N163 in past 24 hours, he said: “there is no difference in price. Remember there is deregulation and marketers will sell as they bought”.

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