A major confrontation is brewing in Nigeria’s downstream petroleum sector as the Federal Government moves to curb what it describes as consumer exploitation. Independent petroleum marketers have issued a strong warning, threatening a nationwide shutdown of their filling stations should the government attempt to enforce price control measures.
According to a report by Punch Newspaper, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, issued this warning on Tuesday.
He stated that enforcing price controls in a deregulated market is unsustainable and would force marketers to withdraw their services.
“Marketers will shut down if they try somehow to enforce price control. We are going to shut down our stations nationwide,” Ukadike was quoted as saying.
He argued that regulation contradicts the principles of deregulation, asserting that the government cannot dictate selling prices without understanding the purchase costs incurred by dealers.
The threat comes after Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to ensure that consumers are protected from profiteering.
The minister’s directive followed public concerns regarding the failure of fuel prices to drop significantly despite a sharp decline in global crude oil prices from a high of $120 to as low as $72 per barrel.
However, Punch reported that IPMAN is pushing back against these allegations. Ukadike noted that independent marketers are currently struggling with financial losses due to recent price reductions, which have left them with costly stock. He emphasized that market forces, not government fiat, should dictate pricing to foster competition.
Instead of price controls, IPMAN is urging the government to focus on boosting competition by ensuring local refineries are operational. Ukadike stated that the primary cause of high prices is the lack of competition, not profiteering by marketers.
“By the time more products come in, you will see that the prices will go down,” he explained, adding that the focus should be on opening import channels and reviving local refining capacity.
The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) has called for stakeholder engagement to resolve the impasse, though they acknowledged the minister’s authority to intervene.
Discussion about this post