PETROAN Advocates for Refinery Privatisation and ₦100bn Grant to Sustain Oil Marketers

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has called on the Federal Government to privatise state-owned refineries and provide a ₦100bn grant to support oil marketers. In its annual review of Nigeria’s oil and gas downstream sector for 2024, the association outlined critical steps to stabilise the industry, tackle inefficiencies, and secure jobs amid rising costs following subsidy removal.

In a statement signed by its President, Billy Gillis-Harry, National Secretary, Adedibu Aderibigbe, and Spokesman, Joseph Obele, PETROAN underscored the need for swift government intervention to prevent widespread closures of oil marketing businesses. The association highlighted the urgency to mitigate job losses and sustain Nigeria’s refining capacity.

Call for Refinery Privatisation to Boost Efficiency

PETROAN recommended the privatisation of Nigerian-owned refineries, including the Warri and Kaduna refineries, as a solution to improve operational efficiency and reduce government spending. The association argued that private-sector management of these facilities could unlock untapped potential and drive growth in the downstream sector.

“Privatising refineries and entrusting them to reputable private companies will not only curb wasteful government expenditure but also enhance the efficiency of refining processes,” the statement noted. PETROAN further emphasized that addressing inefficiencies in state-owned refineries could help reduce Nigeria’s dependence on imported petroleum products and bolster the local economy.

₦100bn Grant to Prevent Business Closures

To shield oil marketers from financial distress, PETROAN has urged President Bola Tinubu to approve a ₦100bn grant. The association stated that the removal of the fuel subsidy in May 2023, which led to fuel prices skyrocketing from ₦170 to approximately ₦1,000, has significantly strained the operations of 10,000 businesses in the sector.

“Without financial relief, many businesses may shut down, leading to massive job losses. The grant is essential to stabilise the sector and sustain the livelihoods of thousands of Nigerians,” PETROAN explained. The organisation also called for measures to ensure fair pricing and a competitive market, discouraging monopolistic practices and promoting transparency.

Enhancing Refining Capacity Through Strategic Measures says PETROAN

PETROAN highlighted the need to prioritise local refineries by ensuring steady crude oil supply. According to the association, this move will increase refining capacity, reduce reliance on imports, and enhance energy security. The statement also advocated for stronger collaboration with neighbouring countries to curb smuggling and improve monitoring through digital tracking systems.

“Providing crude oil for local refineries will unlock the full potential of Nigeria’s refining sector, driving economic growth and securing the nation’s energy future,” the association stated. It urged the government to implement policies that encourage investment in refining infrastructure to make Nigeria a refining hub in Africa.

Ensuring Market Competition and Fair Pricing

To prevent monopolies and ensure fair pricing in the oil and gas sector, PETROAN called for a competitive market environment. The association encouraged the entry of new players into the market, arguing that increased competition would lead to better pricing for consumers and improved services across the value chain.

“We believe that promoting a level playing field will ensure sustainable growth in the sector and benefit both businesses and consumers,” the statement added. PETROAN also reaffirmed its commitment to partnering with the government to address challenges in the downstream sector and enhance the overall economic impact of the industry.

With its comprehensive proposals, PETROAN has set a clear roadmap for addressing key challenges in Nigeria’s oil and gas sector. Its recommendations, including the privatisation of refineries, financial support for marketers, and enhanced refining capacity, highlight the need for strategic interventions to secure the sector’s future and benefit the Nigerian economy.