The Federal Government should try and deepen activities in the downstream sub-sector of the nation’s petroleum industry by creating a more conducive environment and infrastructure for operators, especially marketers, Vice Chairman, Southwest chapter of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Alhaji Debo Ahmed, has said.
The development, Alhaji Ahmed said, became necessary in order to drive the growth of the oil industry, which has been at the mercy of crude oil refining companies abroad.
Many companies, he said, desire to establish refineries in order to improve local production and sales of fuel, but they are discouraged by poor operating environment in the country.
In an interview with The Nation, he said problems such as instability in the foreign exchange market, huge taxes collected by the governments and rising import duties, among others, are deterrents, which operators are running away from in the industry.
Ahmed said: “Fuel marketers are struggling to stay in business because of the fuel landing cost, which keep on increasing. Added to this, is the rising cost of dollar to naira, which is now over N320. By the time the marketers buy fuel from the Nigerian National Petroleum Corporation (NNPC) fuel at between N140 and N142 per litre and sell it to consumers at N145 per litre, how much would be left for the marketers?
“Marketers would not have much problem selling the fuel if they are getting the product from the local refineries. It is absurd to hear that the country finds it difficult to operate the four state-owned refineries years after they were set up by the government.”
Still on importation, Ahmed said fuel is imported with dollar, adding that any country that has weak currency is always at disadvantage when it comes to importation.
“It is because the value of naira is very low when compared to dollar that is why the Federal Government is complaining about the money being spent on fuel importation. When the government considers the money it pays as landing cost of fuel, the cost of fuel will be higher,” he added.
He said the level of infrastructure is poor, noting that the government has refused to repair it. Issues such as vandalisation of petroleum pipelines and bad roads, he said, compounded the poor infrastructural facilities, which the government is struggling to fix. He argued that the government will find it difficult to record meaningful progress in the midst of these problems.
According to him, fuel price is increasing in Nigeria, while the product is sold at affordable price to consumers in other countries such as South Africa because it has good infrastructure in place to aid the processing of crude oil into petroleum products, among others.