PMS landing cost: MEMAN urges NNPC, NMDPRA to embrace accountability, transparency
Olaseinde Gbenga, Abuja
The Major Energies Marketers Association of Nigeria (MEMAN) has called on the Nigerian National Petroleum Corporation (NNPC) to embrace accountability and transparency in their operations.
The association emphasised that lack of accountability and transparency which has resulted in revenue leakages that cannot be quantified.
This was disclosed by the former chief operating officer of the Nigerian National Petroleum Corporation (NNPC) and Senior independent Non Executive Director in the board of SEPLAT Energy PLC, Alhaji Bello Rabiu, during his presentation at the quarterly press engagement in a zoom meeting, themed, ‘Quality Lubricant and Counterfeiting mitigation.’
According to him, “One of the transformation agenda for President Bola Tinubu’s administration is to end the Premium Motor Spirits (PMS) subsidy, and channel the resources to social services.
“PMS is what we consider as master resources as far as the Energy Industry in Nigeria is concerned. It is a product that is almost impossible to deregulate.”
He said, “The New Agenda for downstream Oil and Gas is centred around efficiency, accountability, rehabilitation of infrastructure and sustainable liberalisation of the sector.
“The full deregulation is not limited to removal of government subsidies alone but requires the creation of a competitive market environment, which will guarantee the supply of products at commercial prices to customers.”
He emphasised that competent players must be allowed to fully participate to grow the market through deployment of current technology, good governance and international best practices.
He pointed out that unrestricted and profitable investments in infrastructure must be available, open to all players under a level playing field and which allows earning of reasonable returns to the investors.
“A strong regulator is required, not for the purpose of fixing products prices but to monitor and enable transparent and fair competition amongst players.
“The effective control of natural monopolies such as pipelines, to protect consumers and prevent market dominance is another key role of the regulator.”
Speaking about the issues and challenges of the current state of Premium Motor Spirits (PMS), he said, “a review of the current business model and institutional arrangements establishes the failure of the deregulation policy which has resulted in one dominant player having the sole power to import and fix the prices of PMS across the nation.”
“This is not consistent with the provision of Petroleum Industrial Act (PIA) 2021, which envisages the participation of multiple players operating under an open competitive environment with multiple supply sources from import and domestic refineries under a level playing field, aimed at delivering products at lowest possible prices at the pump.”
Bello reiterated that under the current model, no one knows the actual cost of importing a litre of PMS into the Nigerian market except NNPC Ltd.
“The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) no longer publishes the pricing template to enable the citizens to know the official landing cost of any product.
“However, this situation has resulted in total lack of accountability and substantial revenue leakages that cannot be quantified due to lack of transparency in the process,” he said.
