Oil and gas experts have called on the Federal Government to expand import licences for marketers to boost competition and promote fair pricing in the downstream petroleum sector.
A former Chairman of the Society of Petroleum Engineers (SPE), Joseph Nwakwue, said consumer welfare should remain at the centre of policy decisions, adding that only healthy competition could deliver reasonable pump prices.
The energy expert who expressed support for the Federal Government’s approval of six additional licences for oil marketers to import petroleum products said the step would enhance supply stability and improve price competition in the deregulated market.
“I believe consumers’ welfare is the prime objective of the policy. Fair pricing is what works for consumers at the pump, and we need competition. To get fair pricing in a deregulated market, price contestation is required,” he said.
He added that importation should remain open within a contestable market framework, noting that even with growing local production, competition from imports would continue to play a balancing role until domestic supply fully stabilises.
Fair pricing is what works for consumers at the pump, and we need competition. To get fair pricing in a deregulated market, price contestation is required.
Similarly, Ayodele Oni, Partner and Head of Energy and Natural Resources Practice Group, Bloomfield Law Practice, said the decision was in line with the provisions of the Petroleum Industry Act (PIA).
Mr Oni explained that the law permits importation in situations of supply shortfalls, noting that local refineries were still unable to fully meet national demand despite ongoing improvements.
“The Petroleum Industry Act allows for importation, especially where there are supply shortfalls,” he said.
He explained that issuing limited import licences was necessary to ensure energy security amid current market uncertainties.
“Only a few firms are allowed to import refined petroleum, provided the products are affordable and meet regulatory standards. These measures are interim arrangements to manage a challenging period,” Mr Oni added.
On March 11, the Federal Government approved six new import licences for oil marketers following concerns over supply disruptions linked to global geopolitical tensions.
The development reflects a policy balancing act between reducing reliance on imported fuel and ensuring a steady domestic supply as local refining capacity continues to improve.
A report by S&P Global indicated that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) approved licences covering about 180,000 metric tonnes of Premium Motor Spirit. (NAN)
