A former Chief Operating Officer, Upstream, Nigerian National Petroleum Corporation, Mr. Bello Rabiu, has said that the Nigerian petroleum products market is worth about N1.5 trillion monthly.

In an interaction with New Telegraph over the weekend, he stated that there should be competition in the Nigerian downstream sector.

He called for collaboration among all stakeholders to ensure that there is quality product in the market at the lowest cost of oil refining in the country.

He stated that there could be local refining and importation to engender competition and make the consumers get the best value. Rabiu said: “We are talking of a $1billion market every month minimum.

That is about N1.5 trillion market in the country. So it has implication on everybody. The government should do the needful by engaging all stakeholders and ensure that there should not be anything that will bring corrupt issues and leakages in the system.

“They should also ensure that there is a collective bargaining. Everybody in the industry should be treated equally.

The regulator itself that is the authority and the committee in place should ensure close monitoring of the market behavior and ensure fair competition within the industry.”

Speaking further, Bello said all stakeholders should collaborate to effectively implement PIA, 2021 and achieve lowest cost of refining or importation of products into the Nigerian Market.

He added that regulators should do the needful by engaging all relevant stakeholders and issuing appropriate guidelines that will guarantee cost recovery by all refiners and fuel importers under a level-playing field.

He advised that anti-competitive practices such as collusion and abuse of market share in establishing prices of petroleum products should be collectively resisted by industry players.

Bello said: “NMDPRA and Competition Commission should ensure inclusion of close monitoring of market behavior and using the Competition Law framework to ensure fair competition within the deregulated industry. “There should be transparency in

25 percent Being the average capacity utilisation of the refineries in the last 30 years

the entire downstream value chain to enable consumers know and realize value for what they are paying.

“There should be the management of the price volatility through announcement of monthly guided price.”

He stated that the Nigerian National Petroleum Company Limited (NNPC Ltd) Pipelines and Storage Company should be repositioned and adequately funded under a public-private partnership arrangement to operate as a neutral transportation and storage entity, serving NNPC and all other oil marketing companies under open access regime.

Bello, who is currently an independent consultant, stated that ordinarily, domestic refining should make petroleum products to be cheaper but said that some of the refineries in the country were not operating at full capacity and such could increase their cost of production and the products.

He expressed the optimism that the products from Dangote refinery should be relatively cheaper.

He also warned against an arrangement where Dangote refinery will supply its fuel to only the NNPC Ltd, as according to him, such would lead to monopoly which, he noted is unhealthy for the economy.

Bello said: “They should have less cost so whatever they are producing in the country should be cheaper and better. If look at refineries at NNPC Ltd refineries, in the last 30 years, the average capacity utilisation is about 25 per cent.

And therefore it is difficult for any refinery in Nigeria today to actually produce effectively and cheaply.

Certainly the cost of production is higher than the imported product and that means there is no way they can compete with that.

They have to do a lot to even sell the price at the price that they produced the product. “But what you are seeing in Dangote will be different because clearly, it has higher capacity and higher efficiency in terms of the volume of the product they are producing that is what you should be expecting.

“Will that make for efficiency? If you say the entire product that the Dangote will be producing will be sold to NNPC Ltd, that will be a monopoly that will be created.

We should not allow that to happen. The market can determine the price of the product. Once you allow people to import, and also make the refineries to work, two of them will be working to ensure that they deliver the most efficient price but if you allow only one person or allow monopoly to continue, then we will run into a problem.”