Stakeholders in Nigeria's midstream and downstream sectors have called on the Federal Government to address the key challenges facing the country's petroleum industry and outline strategies for a sustainable future.
The workshop, which had the theme “Deregulation of the Nigerian downstream sector: The day after,” brought together key industry players to discuss the implications of full deregulation of the downstream sector.
During the workshop, Farouk Ahmed, the CEO of the Nigerian Midstream and Downstream Petroleum Regulatory (NMDPRA), stated that the authority would allow free market pricing once the sector was fully deregulated.
He was supported by Ogbugo Ukoha, the Executive Director of Distribution Systems, Storage & Retailing Infrastructure, DSSRI NMDPRA, who spoke on the role of the regulator in pricing, safe operation, and enforcement. Gary Still, the Managing Director of CITAC Africa, also touched on market liberalization or elimination of subsidies.
Industry stakeholders at the workshop called on the government to implement appropriate palliatives in the form of public transportation, freight of agricultural produce, ensure transparent and effective communication, improve access to foreign exchange, trade finance, guarantee strategic stock, and provide access to crude oil for refineries ahead of the plan to embark on the total removal of petrol subsidy.
The workshop offered the industry regulator and all players across the midstream and downstream value chain the opportunity to deliberate on measures that needed to be put in place ahead of the full implementation of the Petroleum Industry Act (PIA) in Nigeria.
Participants at the online session also focused on the need for operators in the industry to institutionalize the professionalization of the midstream and downstream petroleum sectors ahead of the take-off of full deregulation.
The Deputy National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Elder Chinedu Okoronkwo, who was represented by Mr. Mike Osatuyi, IPMAN's National Operations Controller, disclosed that the marketers are in full support of the government's plan to embark on full deregulation of the downstream sector.
He warned Nigerians to prepare to pay up to N750 for every litre of petrol after the full implementation of the subsidy removal, adding that the pump price is likely to drop to around N500 if the Government encourages the Central Bank of Nigeria (CBN) to provide forex to marketers at the official rate.
Osatuyi also urged the government to channel savings from subsidy provisions to provide palliatives to the masses. He charged the government to be alert and sensitive to resentment from Nigerians.
Alhaji Lawal Yusuf Othman, National President of the Nigerian Association of Road Transport Owners (NARTO), in his presentation, warned that the full deregulation of the downstream sector and complete removal of petrol subsidy will introduce a mix of opportunities and challenges into the operating environment.
Similarly, Mr. Taiwo Oyedele, the Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers (PwC), in his presentation, charged the government and the regulator to identify potential pitfalls that could trigger resentment from citizens before, during, and after the removal of the petrol subsidy.
According to him, deliberate public sensitization, industry engagement, and collaboration with civil society organizations are needed to aid public buy-in during the implementation of full deregulation by the government.
He said that in the course of implementing the policies, the government's interpretation of its strategy must be issues-based and not confrontational.
In conclusion, the workshop offered industry players the opportunity to discuss the implications of full deregulation of the downstream sector.