Oil and gas experts at the Institute for Energy and Extractive Industry Law have stressed the need for the federal government to protect and strengthen regulatory agencies in the industry in order to boost competition and prevent monopoly in the sector.
In the same vein, the analysts canvassed for protection and support to local players in the Nigerian petroleum refining and marketing space through introduction of business-friendly fiscal policies capable of enhancing investment by indigenous companies.
A consultant at the Institute, Dr. Taiwo Ogunleye and an independent energy analyst, Mr. Ademola Adigun, made the calls while making presentations at a one-day workshop in Lagos.
The topic of the workshop was "The Midstream and Downstream Petroleum Industry in Nigeria: The Roles of NMDPRA in Ensuring Energy Security."
Their advocacy came on the heels of the recent spat between the management of Dangote Industries Limited -owners of the 650,000 barrels per day Dangote Petroleum Refinery, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
In his presentation, Adigun called for a substantial review of fiscal policies that will entrench competition and strong regulatory environment in the Nigerian oil and gas industry.
He said regulatory issues were key to creating efficiency and transparency in the petroleum products supply value chain, warning that the regulator must not be weakened by the actions of the government, the players and the public to avert the collapse of the downstream petroleum industry.
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While pointing out that NNPC would not sell crude below cost of production since crude oil is an international product, he advised that Nigeria must be guided by international best practices.
He also warned about the continuous subsidy payment on petrol, which he said had hit N8 trillion, saying that has made the market uncompetitive and continues to create disruptive supply arrangements.
"As at today, landing cost of petrol is N1,100 per litre aside from associated costs of trucking the product to dispensing outlets. The last time we checked, subsidy was around N5 trillion. But today, as I speak with you, subsidy has gone to about N8 trillion", Adigun stated.
Earlier in his presentation, Ogunleye stated that monopoly was not the way to go for any market that wants the best for all stakeholders.
According to him, as enshrined in the Petroleum Industry Act (PIA), no single person or institution must owe and control more than 40 per cent of fuel supply and distribution in Nigeria.
