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Subsidy Withdrawal: NMDPRA cautions marketers against overpricing, profiteering

Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Engr. Farouk Ahmed, has cautioned oil marketers against overpricing and profiteering after the withdrawal of subsidy on Premium Motor Spirit (PMS). He stated that while NMDPRA, as a regulator, will not put a price cap when the downstream sector is liberalised or deregulated, it will, however, protect consumers of petroleum products.

He said that industry players, regulators, the government and Nigerians need to get prepared for the deregulation of the downstream sector. He spoke yesterday during a virtual workshop of the Nigerian Petroleum Downstream Industry and the African Refiners and Distributors Association (ARDA). The workshop addressed key challenges and outlined strategies to ensure a sustainable future for the petroleum downstream sector. It also focused on risk management and self-regulation, effective change management, and communication and stakeholder engagement and the need for proactive planning and implementation of the “adoption of gas” initiatives as a transition fuel towards achieving Net Zero. Ahmed said: “There is a need for collaboration in the industry. We have to be responsive to the market as a regulator and you have to be responsive to the market as a player, meaning that we have to think for the consumers and also for the investor. We have to try to find a balance.

“There are three main areas as far as a regulator is concerned, which is fair price. If there is a deregulation today, as a regulator, we are not going to make the mistake of the past which is to set a price cap. That is not deregulation. If we liberalise the market, we have to allow the market forces to work, we later monitor the market player.”

He added: “The Federal Competition and Consumers Protection Commission, (FCCPC) is in collaboration with us. It is our business to ensure that the consumer is protected; otherwise, there will be sanctions. But we are not here as police, we are here as business enablers. At the same time, we will protect the consumers.” The Chairman, Major Oil Marketers Association of Nigeria (MOMAN), Mr Olumide Adeosun, urged the NMDPRA to ensure supply security of petroleum products and ensure that customers are not cheated and that they should level the playing field to ensure that industry participants have the same opportunities. The President of the Independent Petroleum Marketers Association of Nigeria, (IPMAN), Elder Okoronkwo, represented by IPMAN National Operations Controller, Mike Osatuyi, said the government and the industry operator should make Nigerians cooperate when subsidy is removed, adding that the government should invest well the savings from the subsidy withdrawal.

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