The first batch of petrol, consisting of 27 million litres, has been imported by an independent marketer, ending the longstanding downstream monopoly market previously held by the Nigerian National Petroleum Company Limited (NNPC). The vessel, ST Nnene, arrived in Ijegun-Egba after adverse weather conditions delayed its arrival.
Emadeb Energy’s Chief Executive Officer, Adebowale Olujimi, and five financial institutions, including Polaris, First Bank, Union Bank, Access Bank, and Fidelity Bank, bankrolled the $17 million deal to hire the vessel for petrol importation.
Foreign exchange rates have risen significantly, reaching N845 to one dollar, and crude oil prices have surged to $80 per barrel. These factors, along with the end of subsidies costing the country about N12 trillion, have contributed to the rise in petrol prices, reaching N614 per litre.
At the arrival ceremony, Olujimi emphasized that petrol importation is not a sustainable solution for the country. He advocated for the revival of local refining as the way forward.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and petroleum workers’ unions also supported the move towards local refining and emphasized the importance of deregulation in fostering competition and fair pricing in the downstream sector.
Opinion:
The arrival of privately imported petrol in Nigeria marks a significant milestone in breaking the downstream monopoly held by NNPC. Introducing competition in the sector can potentially lead to more reasonable petrol prices for consumers, especially if market forces are allowed to determine pricing. However, it is essential for the government and regulatory authorities to closely monitor the situation to ensure that quality control standards are maintained, and marketers do not engage in excessive profiteering. Additionally, the call for the revival of local refining is a step towards achieving energy self-sufficiency and reducing the country’s reliance on fuel imports. The government must invest in supporting local refineries and ensure that they meet the necessary standards for safe and efficient production.