As the effects of the fuel subsidy removal hits the country, operators in the oil and gas industry have urged the Federal Government of Nigeria to prioritize investment in domestic refining of petroleum products. Nigeria is one of the largest exporters of crude oil in Africa and the world. However, apart from the country’s inability to meet the quota set by OPEC, its government has not found lasting solutions to the non-functional local refineries despite huge amounts budgeted for their operations every year.
While commending President Bola Ahmed Tinubu for removing the fuel subsidy, operators lamented that the inability to refine products locally is not sustainable. This is considering the volatility of international market prices for petroleum products and the weakness of the naira against the dollar. This means that as the prices of importing premium motor spirit (PMS) rise in dollars, their naira equivalent is not sustainable for these operators. Given that the local currency is weak in the foreign exchange market, it causes an enormous increase in cost, which is transferred to the final consumer.
CEO calls on the government to ease access to forex.
Emadeb Energy Services Limited has had the honor of being the first to import PMS into Nigeria. Speaking on this, the firm’s chief executive officer (CEO), Adebowale Olujimi, calls on the government to create a special window for petroleum marketers to easily access foreign exchange, particularly the dollar, strictly for importing PMS. He said that it would help alleviate the suffering of the masses by easing the process and cost of importing the product. The window is ideally meant to resolve the issue of dollars and have a fixed market rate for operators to bring in petrol without any condition.
In the same vein, the executive director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Sadiq Bashir, who was representing the CEO, Farouk Ahmed, explained that the significance of the event was to show that deregulation has been embraced, and subsidy removal has become a thing of the past. He said that the move is also a clear demonstration of the importance of partnership and collaboration as stakeholders in the industry to diversify the supply of petroleum products in the country.
NMDPRA boss said the business model can be implemented.
Olujimi had earlier said that they would love the government to listen to them because as much as they are business people, they are also considerate of others. They know that PMS is an inevitable product in the day-to-day activities of Nigerians, but they cannot “sit and watch Nigerians suffer.” However, NMDPRA CEO said that the company has shown that the removal of fuel subsidy in Nigeria is possible and the business model can be successfully implemented in the country.
He maintained that deregulation is not about pricing but about opening up the market. “What we are doing at NMDPRA is ensuring that first of all, we guarantee supply by licensing people to import the products where necessary, or in the case of licensing, refining companies downstream to make sure that this product is produced in the country,”. The regulatory authority also ensures that the products are of high quality and the right quantity.
NUPENG secretary commends Emadeb for taking the responsibility.
At the event, the Emadeb boss commended the current administration for deregulating the market. He said that they decided to be one of the early investors in the present model. “Before now, NNPC had been the dominant market supplier and we felt we should do it in another way by running our business without depending on NNPC,”. Also, the general secretary of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Comrade Afolabi Olawale, praised the company for taking the bold step to bring in the first product into Nigeria as a private entity.
Related Link
Emadeb Energy Group: Website
