Deregulation: NMDPRA unveils fuel import requirements, processes licences for interested companies

*Farouk Ahmed, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, says it has agreed with the major stakeholders, including the NNPC Limited, MOMAN and DAPPMAN, that the oil market is deregulated and there is no price capping, as ‘the Authority’ is already processing import licences for interested companies

Gbenga Kayode | ConsumerConnect

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) also known as “the Authority” has said President Bola Ahmed Tinubu’s recent termination of fuel subsidy regime, especially on Premium Motor Spirit (PMS) also called petrol, other interested parties in the petroleum industry are free to import products, once such meet the stipulated requirements.

ConsumerConnect reports the NMDPRA Wednesday, June 14, 2023, in Abuja, FCT, disclosed the PMS importers must meet regulations as stipulated by the Petroleum Industry Act (PIA 2021).

Mr. Farouk Ahmed, Chief Executive of NMDPRA, stated this while briefing reporters shortly after a meeting with the Oil Marketing Companies on expectations on post-petrol deregulation in the downstream sector.

Ahmed also explained the authority was looking at the flexibility and ease of doing business so as to enable importers to import petroleum products with ease.

According to him, the meeting with the stakeholders became necessary regarding the current situation in the downstream sector, particularly in regard to President Tinubu’s pronouncement on removal of petroleum subsidy on PMS.

He further stated: “The engagement aims at aligning and also rolling out policies in terms of requirements for the quotation of PMS.

“We thought it is necessary to fashion out areas of concerns and promote clarity regarding the way forward.”

“There will be transparency while conducting the business of the importation of PMS both by the major marketing companies, MOMAN, and the DAPPMAN, as well as the NNPC Limited.

“NNPC was the sole importer of PMS in the past but again with the advent of the removal of subsidy on that product, it is necessary to open the way to other interested parties that want to import so long as they meet the requirements,” he said.

Application of FCCPC’s regulation for downstream

Ahmed further disclosed that the NNPC Limited would be drawing down on products importation from being the sole importer to bringing in about 30 to 40 percent maximum, in line with provision of the Federal Competition and Consumer Protection Commission (FCCPC) regulation for the sector.

He also said: “The regulation says that nobody should exceed 40 per cent of the market share in terms of their own regulations and we want to abide by that.

“We also deliberated on some concerns in terms of provision of foreign exchange for them to import.

“We also discuss the issue of quality of product importation and the source locations.

“So we deliberated on how to control and ensure that all the products imported into the country or distributed locally meet the requirements so that the consumer is not negatively affected.”

The NMDPRA Chief noted: ‘We also discussed our collaboration with the law enforcement agencies, especially regarding the movement of products across the country.”

NMDPRA sets no price capping for petroleum products

On pricing, Ahmed said the meeting discussed and agreed that as much as the market was deregulated and there was no price capping by NMDPRA, that it would take responsibility by ensuring that the prices would be reflective of the market.

According to him, the meeting understood that prices would not be the same all across the country because of local transportation and logistics.

The NMDPRA Chief as well stated: “For example, the price in Lagos being the main receiving location for imports will not be the same with the prices in Ibadan, Sokoto or Borno states because the local transportation costs will be added to the price.

“We also agreed finally that we should have a small team to look at some critical aspect of the PIA that warrants only those with refinery or those with international trade experience are allowed to import.”

The Authority already processing licences for  companies

The Chief Executive further noted it agreed that NNPC Limited would continue to import until there was critical mass for other importers, yet it the regulator already processing licences for interested companies.

The NMDPRA is fast-tracking the process of issuing them licenses to import, said he, adding that it was interacting with NNPC Limited to ensure that the market was already well supplied products without gap in importation.

In attendance at the meeting were

The engagement had in attendance officials of the Major Oil Marketers Association of Nigeria (MOMAN), Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), and Nigerian National Petroleum Company Limited (NNPC Limited), among other industry stakeholders.

Kindly Share This Story