Chief (Dr.) Kolawole Adewoyin is the National President of Independent Petroleum Marketers Association of Nigeria (IPMAN). In his 2021 forecast the IPMAN boss in an interview with Ibrahim Apekhade Yusuf is optimistic that once the four refineries are effectively privatised and other private refineries come on stream, Nigerians can buyer petroleum products at cheaper and affordable rates. Excerpts:As the President of IPMAN what is the expectation for the new year in your sector given the fact that the price of crude oil is still low due to the dwindling global oil price, the country may not expect a lot in terms of oil receipts. What can be done'Well, as an oil marketer, we want the products to be readily available for us. If the government wants to be sincere, it is supposed to make the oil and gas sector a fully deregulate the sector and hands off 100 per cent by this year. Another important thing is that the government seems not to be willing to repair the already dilapidated refineries that we are have. All the government needs to do is to privatise them immediately so that the price of refined products will come down drastically. Its scandalous that we still have to endure this unnecessary cost all the year round because were importing when we have the raw material for production of refined petroleum products. We have the raw material, we have human capacity, and we have capital even to do it. Its better for government get the refineries privatised since they are not capable of fixing the refineries. I bet once the private investors set in, it will be to the benefit of everybody in terms of reduction in price including the masses. If the four refineries are functioning and the other proposed refineries come on stream, there will be no need to import, no need to pay NPA charges, NIMASA charges, Customs duty charges, transfer charges, and other sundry charges complying with import agreement, settling onshore and offshore obligations, etc., that jack up the cost. All these things will not be there. So we expect the government to be proactive and should understand that petroleum products have serious competition now. We now have electric motors that we dont need to use fuel. There is even water. The Japanese are looking at how to use water to generate power and even running vehicles on water. So the government needs to be serious with the oil and gas sector. Well, the crude oil deposits will not dry up anytime soon but the price in the global market will keep fluctuating to the detriments of economies like Nigeria.So what youre saying is that the government should the privatisation of the refineries very seriously'Yes, very seriously. A sat now, it is only the NNPC that is importing fuel and they are given concession in the area of forex. So the major and independent marketers none of them are importing yet because there is no profit. But there is lot of things government can do to make the sector attractive to investors. That is our expectation. The capital we are investing is been dried up by the overhead cost even the little margin we are making is not bankable. Banks are no longer granting us facilities because of the high risk-nature of the business. For instance, a truck we used to buy for N1.8m increased to N2.5m, N3.5m now its over N5m to bring a truck load of PMS from the depot. Whereas the cost of PMS has skyrocketed, the margin we are getting remains very infinitesimal. So were getting poorer and poorer. And that is why were appealing that in this new year to the government should put measures in place that would enable the cost component of petroleum, especially in terms of import to be taken care of so that there would be price reduction. And the only way is to fix the refineries by selling them to private investors.From your experience, how much do you think marketers would be losing in terms of profit margin to the rising cost of importation of petroleum products'I may not be able to hazard a guess. All I can say is that it may be within the We are looking at billions of naira. What we are saying is that the government should do something rather leave everything to the vagaries of the market, especially the global crude oil prices. The challenge I see in the sector is the emergence of other strong players in the industry which has made competition very stiff. You recall that our biggest buyers used to be the USA, but today, they export oil to other parts of the world. Even China that was also buying from us has branched into other African markets like Cameroun, Niger Republic for instance. China is financing the refinery and theyre producing for the Chinese market. Even Nigerians are also considering importing from Niger. Its a funny scenario. It is the rest of us that are at the receiving end.
Click here to read full news..
