Resurgent calls for a full and transparent deregulation of the downstream oil and gas sector have greeted the recent increase of about five per cent from N160/litre to N168/litre in the retail prices of petrol. In a statement on Sunday, some stakeholders in the downstream value chain of the oil and gas sector insisted that deregulation remained the most appropriate and sustainable direction available to the nation as global price of crude oil continues to reel under the pressure of the global COVID-19 pandemic.
They said analysis of the sector showed that with the current pump price of petrol at N168/litre, the cost of sales, which represents the direct cost attributable to bringing petrol to the point of sales, was estimated at about N161.81/litre.
“This represents 96.32 per cent of the total cost to marketing and distribution companies, implying that such companies based on the pricing template only have a thin margin of about 3.68 per cent to cover running costs and make additional investments in infrastructure development,” they said.
Speaking on deregulation of the sector, Chairman, Depot and Petroleum Products Marketers Association of Nigeria, Mrs Winifred Akpani, said the organisation welcomed recent development around the subject but believed now was the time for the sector to embrace full deregulation. She explained, “As deregulation opens up the market for new opportunities, we will begin to witness unprecedented push in the sector towards promoting global standards in the supply chain management thereby creating a system that gives the buying public added value for money.”
Energy expert and Director, National Oilwell Varco, Dr Babajide Agunbiade, said Nigeria might never harness the full development potential of its oil and gas sector with the continued inefficiencies within the value chain.