…Affirms need for free mkt economy to ensure customer focused pricing, industry stability
UGO AMADI
Major Energies Marketers Association of Nigeria (MEMAN) has outlined its stance on the evolving Nigerian oil and gas sector, emphasizing the need for a free market economy to drive growth, innovation, and lower gasoline prices.
The association emphasized this in a press training on Refinery Operations & Trade Flows in Nigeria, designed to provide energy correspondents and legal advisers with key insights into refining operations, the role of mega refineries, and the impact of trade flows on energy security and pricing.
The session, themed “Refinery Basics, Gasoline Pricing & Trade Flows in Nigeria,” brought together experts to discuss key industry issues, including refining processes and global gasoline pricing mechanisms.
Notable speakers included Engr. Mark Williams, a petroleum refining expert, and James Gooder, VP of Crude Oil at Argus Media, who provided valuable insights into the factors influencing gasoline pricing and the benefits of global trade flows.
Clement Isong, CEO of MEMAN, underscored the need for Nigeria to transition to a competitive, deregulated market. He stressed that while the Petroleum Industry Act (PIA) is being successfully implemented, it is essential for the country to embrace complete deregulation to enhance efficiency, investment, and transparency.
Isong acknowledged that there would likely be opposition to such changes but he maintained that a free market approach would create a level playing field that would benefit both businesses and consumers.
James Gooder, VP of Crude Oil at Argus Media, supported this view by discussing the emerging competition in the Nigerian market, especially with Dangote’s refinery coming online.
He explained that local production is driving down the price differential between Nigerian and European gasoline prices, a shift that would not have been possible under the previous state-controlled pricing system. Gooder observed that this competition is forcing local producers to improve efficiency and, as a result, gasoline prices have begun to reflect global market trends.
He explained, “What you can see is that the price of the pump now reflects the market price. It’s not a fixed price like it used to be.”
Gooder’s analysis highlighted that deregulation has positioned Nigeria as an exporter of gasoline for the first time in years, with exports heading to markets as distant as Russia, Brazil and even the United States. This development is a clear sign that the deregulated market is beginning to function effectively, with Nigeria both producing and exporting oil products.
This was bolstered by Engr Mark Williams, who stated that the existing mini refineries in Nigeria, more often called ‘Modular Refineries’, are basically focused on exportation of their products and not on domestic consumption.
Notably, the evolution of a free market economy has opened the doors to more inclusion in the domestic downstream sector with Dangote Refinery able to source crude from wherever it wants for refining, and private oil marketing firms getting the go ahead to import finished petroleum products into Nigeria.
An interesting point made by Gooder was the assertion that Dangote Refinery’s entry into the market has created a disruption in global oil supply dynamics; however, it might not readily translate into drastic reduced gasoline prices immediately, as the refinery was still subject to market forces.
A significant issue MEMAN addressed was the inefficiency of past price control mechanisms, which, while intended to protect consumers, had detrimental effects on the economy and the environment. Price subsidies for gasoline led to excessive fuel consumption, contributing to environmental harm and encouraging smuggling. By eliminating price controls, MEMAN believes Nigeria can better align fuel prices with market realities, incentivizing more sustainable consumption habits and reducing waste.
Gooder pointed out that the removal of price controls has already started to curb demand. This reduction in demand is expected to have positive environmental effects as consumers are now more conscious of their fuel consumption.
Moreover, this would open the door for more sustainable energy practices, as the competition spurred by market forces will encourage investment in cleaner technologies and energy-efficient solutions.
MEMAN further stated that despite it’s call for full market economy, it is also imperative that the sector have strong regulatory oversight, by bodies like the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Federal Competition and Consumer Protection Commission (FCCPC), designed to ensure that the benefits of the market economy are realized without price collusion or gouging.
