The NMDPRA boss did not reveal the identity of the three marketers expected to begin importing petrol into the country.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Wednesday said petroleum marketers will from July this year start the importation of petroleum products into the country.
The agency's Chief Executive, Farouk Ahmed, disclosed this while addressing journalists shortly after a meeting with oil marketers on Wednesday.
"The importing market is already open. We have to follow the regulations so we roll out very user-friendly policies. Some of them (marketers) have already started putting their applications in place because we don't want to create a gap," Mr Ahmed said.
"We are processing licenses. Already, three oil marketers will from July this year start importing petroleum products into the country. So these are some of the very interesting things that we have received."
The NMDPRA boss, who didn't specify the identity of the marketers expected to begin importing petrol into the country, noted that the agency is fast-tracking the process of issuing oil marketers licenses to import.
"Again, we are interacting a lot every day with Nigerian National Petroleum Company Limited (NNPCL) to ensure that the market is already well supplied and that there is no gap in importation," he said.
He said NNPCL was the sole importer of petroleum motor spirit (PMS) in the past. But with the advent of the removal of subsidy on that product, Mr Ahmed said it is necessary to open the way to other interested parties that want to import so long as they meet the requirements and the regulations of the Petroleum Industry Act (PIA).
"The Authority held a meeting today with oil marketing companies to raise awareness of the requirements of the PIA regarding the full deregulation and importation of petroleum.
"The first thing we get priority is transparency in which we will conduct the business of the importation of premium motor spirit (PMS) both by the major marketing companies, Major Oil Marketers Association of Nigeria (MOMAN), and Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), as well as the NNPCL," he said.
He explained that NNPCL had agreed to reduce its petrol import volume to give room for other players in the industry and any marketer licensed to import petroleum products must comply with set guidelines.
"Then at the same time, we'll look at the flexibility and ease of doing business for it, to enable them to import with ease," he added.
New Model
Mr Ahmed said NNPCL is going to be drawing down on their importation from being the sole importer to bringing in about 30 - 40 per cent maximum in line with the provision of the Federal Competition and Consumer Protection Commission (FCCPC) regulation which says that nobody should exceed 40 per cent of the market share.
"We also deliberated on some concerns in terms of the provision of foreign exchange for them to import," he said.
The official emphasised the urgent need for product standardization to prevent situations where consumers might be cheated by the importation of off-spec products into the country.
"We also discuss the issue of the quality of product importation and the source locations. Quality is a very important aspect as well. So we deliberated on how to control and ensure that all the products imported into the country or distributed locally meet the requirements so that the consumer is not negatively affected," he said.
Mr Ahmed revealed that the oil marketers also reached an agreement to enhance cooperation with security agencies to facilitate the seamless supply and distribution of petroleum products across the country. He added that the issue of pricing of petroleum was discussed with the oil marketers and it was agreed that there will not be capping of prices to allow the forces of demand and supply to determine prices.
"We all agreed that as much as the market is deregulated and there's no price capping by NMDPRA, we also believe that we'll take responsibility by ensuring that the prices would be reflective of the market.
"Down so far, cost plus the cost of importation and the profit margin and of course all other logistical costs that would also be taken into account before they impose their prices across the country," he added.
He said during the meeting, the oil marketers understand that prices will not be the same all across the country because of local transportation and logistics.
For example, he said the price in Lagos being the main receiving location for imports will not be the same as the prices in Ibadan or Sokoto or Maiduguri because the local transportation costs will be added to the price.
"So it is similar to what we had in the past where we had the bridging or rather equalisation.
"Also, we had the matrix which spells out the cost of moving a truck from one location to another and it was built into the price. So there is no equalisation or bridging fund. So it's a reflection of the accurate cost.
"So after all of that was done we also agreed finally to say that we should have a small team to look at some critical aspect of the PIA that warrants only those with refinery or those with international trade experience are allowed to import," he said.
Subsidy Removal
President Bola Tinubu had, in his inaugural address on 29 May, announced the removal of fuel subsidy. The stance he had also maintained in his campaign as a candidate during the election.
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Following the announcement, the NNPCL directed its outlets nationwide to sell fuel between N480 and N570 per litre, an almost 200 per cent increase from the initial price below N200.
The hike immediately triggered an increase in transportation fares and prices of goods and services by various percentages.
Last Monday, the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) said they would no longer proceed with the nationwide strike planned for Wednesday.
The decision came after a meeting between the federal government and the labour unions at the Presidential Villa, Abuja.
The Nigerian government has repeatedly said the subsidy on petrol was unsustainable due to the amount spent. Over N4 trillion was used to subsidise petrol last year, more than the government spent on education and healthcare combined.
This year, the immediate past government of Muhammadu Buhari only provided budgetary allocation for petrol subsidy until 30 June after saying it would leave the incoming administration to make a final decision on the matter.
However, critics of the fuel subsidy removal argue that it will further weaken the purchasing power of Nigerians and impoverish more citizens in a country where almost half of the population is poor.
