Fuel Price Increase Does Not Make Us More Profitable-Oil Marketers

The Independent Petroleum Marketers Association of Nigeria has called on the Federal Government to ensure complete deregulation of the downstream sector of the petroleum industry, stating that it is critical to creating a competitive environment.

The West Zonal Chairman, IPMAN, Dele Tajudeen, who said this decried the uncompetitive state of the industry.

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He stated that the cost associated with movement of products to some parts of the country is still being subsidised by the Federal Government.

Tajudeen spoke at the TVC News Business Nigeria programme on Tuesday.

He said that the increase in the pump price of petrol does not, in any way, boost the profit margins of the oil marketers, adding that such increase is just a reflection of the international price of crude oil.

He said, “The downstream sector is not fully deregulated, the government should ensure it’s full deregulation this is the only way we can have a competitive market.

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“The sector has been faced with several challenges, coupled with the COVID-19 pandemic with disrupted economic activities.

“COVID-19 pandemic led to a sharp drop in consumption of petroleum product, as vehicular activity, business activities were all shut down.”

He noted that factors such as poor road infrastructure, imposition of levy by state governments, as well as federal regulators have challenged the activities of the independent marketers across the country.

Speaking further, he called on the National Assembly to ensure quick passage of the Petroleum Industry Bill, adding that it is critical to the growth of the industry.

He said, “The PIB will further lead to the competition in the market, and when we have competition, the prices will be dropped.

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“The government has not been fair to us as independent marketers, IPMAN was established to allow effective participation of Nigerians in the market, but what we see is situations where only the major marketers receive support from the government and this is not good for us.

“Over 70 per cent of filling stations are registered under IPMAN, hence we need all the support we can get. We need to be able to access bank credits at lower interest rates.

“The government at this time must be considerate with its policy, the increase in fuel prices does not reflect in our margin. And our margins in this business is usually small. So we need the support of the government.”

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