PETROAN seeks 6-month petrol price stability to ‘reduce investment risks’ in downstream

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has asked the federal government to establish mechanisms to ensure price stability for six months.

PETROAN, in a statement signed by Joseph Obele, public relations officer, on Monday, said it will reduce massive financial losses in the downstream petroleum sector caused by sudden petrol price fluctuations.

The retailers said the sudden downward review of prices has resulted in massive losses, with those affected counting their losses in billions of naira. 

“This situation poses a significant fear for further investment in the sector, as investors are wary of unpredictable market conditions,” PETROAN said.

“Moreover, the threat of price fluctuations is affecting the business boom of the sector, which will definitely lead to retrenchment. 

“This will have far-reaching consequences, including job losses and economic instability.”

PETROAN said ensuring price stability for at least six months will reduce uncertainty and risk associated with investments in the sector,

“This approach will help reduce the uncertainty and risk associated with investments in the sector, ultimately promoting economic development and protecting the interests of consumers and Nigerians,” the association said.

PETROAN also commended the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Federal Competition and Consumer Protection  Commission (FCCPC) for their efforts in promoting healthy competition.

However, the group urged the regulatory bodies to remain vigilant and prevent unfair competition practices.

The retailers also called for a collaborative approach among stakeholders, including government agencies, regulatory bodies, and industry players, to establish mechanisms that promote price stability. 

“This includes transparent pricing models, effective regulation, and strategic reserves that can be tapped into during times of crisis,” it added.

PETROAN, therefore, urged NMDPRA to quickly swing into action to ensure fair pricing. 

‘MULTIPLE SOURCES OF SUPPLY WILL FOSTER COMPETITION’

PETROAN also warned against monopolies and unfair competition in the downstream oil sector, adding that there is a need for healthy competition and protection of local refineries.

“The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has taken a firm stance on promoting healthy competition and controlling price fluctuations in the downstream sector,” the group said.

“To this effect, PETROAN advocates the importance of preventing monopolies and ensuring local refineries thrive, given their significant economic benefits to the country.

“PETROAN firmly believes that a competitive downstream sector is not just beneficial but necessary.” 

According to the petrol retailers, it would be better to allow multiple sources of supply, including  Dangote refinery, NNPC refineries, modular refineries, and imports. 

“This diverse range of sources will foster competition, especially with imports, allowing for comparisons with international market prices and protecting the local market from exploitation,” the retailers said.

PETROAN advocated for policies that dismantle barriers to entry for new players, promote fair practices among existing companies, and ensure that no single entity can dominate the market to the detriment of consumers.