Oil Marketers have decried the low profit margin in the downstream oil sector, stating that there is need for an equitable pricing system to boost sectoral growth.
The National President of the Independent Petroleum Marketers Association of Nigeria, Chinedu Okoronkwo stated this during an interview on Arise TV.
Okoronkwo said that there is need for the petroleum equalization fund to be allowed to function in order to promote an equitable pricing system in Nigeria.
He said, “For us in IPMAN we are looking for a situation where petroleum equalization will be allowed to function, and ensure that there is this equitable pricing in Nigeria, it may not be the same exact pricing but the disparity should not be very wide.
“I can tell that we don’t have any profit, we are just hanging in there. We were earlier buying the product for about N2m with maybe N10 margin but now we buy for almost N6m with the same N10, how do we break even?”
Speaking further, Okoronkwo stressed on the need to allow for full deregulation of the sector, adding that it would free up the activities of the industry as well as attract investors.
He said, “Our position on the matter is that the business needs to be deregulated because a situation where you don’t know what to expect in the market does not give a clear direction on how to plan.
“I believe the country is going through a lot of process, having this product is not easy but I know the government is doing everything to make sure that the masses do not face problem getting this product.
“And the only way out is to deregulate the market and allow market forces to be the determinant of the business moving forward.”
Speaking further on the benefits of deregulation, he said that it would allow the system to control itself.
“For us in IPMAN we believe that by the time we begin full deregulation, small modular refineries and the big ones like the Dangote and the BUA, a lot of things will begin to come up in this sector and the price will come down.”
He said that the passage of the Petroleum industry bill would give a clearer direction on how the petroleum business should be executed.