Petroleum Marketers Warn Of Oil Market Structure Disruption

The Hoscom Bulk Petroleum Retailers of Port Harcourt Refinery has warned of perceived asymmetrical market structure where possible monopoly is being driven by the action of the Nigerian National Petroleum Company Limited (NNPCL).

The marketers expressed concerns over the statement credited to the group chief executive officer of the Company, Bayo Ojulari, during a courtesy visit by the leadership of PENGASSAN.

Ojulari was quoted as mentioning that upon assuming office, he found that operating the refinery was resulting in financial losses, prompting the decision to halt operations in search of a sustainable solution.

The Hoscom emphasised that nation-owned refineries serve as a price check mechanism against private refineries.

The group in statement jointly signed by High Chief Sunny Nkpe, BoT chairman, Dr. Joseph Obele, Administrative Secretary, Promise Oluka Ochen (BoT) member, Emmanuel Inimgba, Bot secretary, Hon. Dickson Oballey, Board Member, Pastor Tekena Ikpaki, Administrative Chairman and Board member and Chief Zephaniah Sample, Bot Member, the group noted that, by shutting down their own refineries, NNPCL is essentially removing a crucial check on prices, allowing private refineries to dictate the market.

This move undermines the purpose of having state-owned refineries and gives undue advantage to private entities.

Moreover, Hoscom criticises NNPCL for proudly stating their reliance on equity stake in Dangote Refinery, a private entity, while shutting down their own refineries. “NNPCL should be ashamed to proudly state their reliance on the equity stake in a private refinery while shutting down their own,” the group stresses.

Notably, NNPCL’s stake in Dangote Refinery stands at 7.2 per cent, contrary to the initially agreed 20 per cent, due to non-payment of the balance. The statement says that Nigerians are disappointed that the refinery was shut down by GCEO despite spending $1.5 billion on its rehabilitation.

The Hoscom Bulk Petroleum Retailers expressed support to PENGASSAN’s call for the revamping of the four Nigerian refineries. We urge President Bola Ahmed Tinubu to take decisive action in making the refineries functional to boost GDP and create jobs, they noted.

Ojulari’s statement, according to them, has vindicated stakeholders in the oil and gas sector who earlier suspected that the GCEO of NNPCL was working in favor of a private refinery at the expense of the nation-owned refinery.

The alleged efforts to give an edge to a private refinery have raised concerns among stakeholders.

According to Hoscom, Ojulari’s decision to shut down the Port Harcourt Refinery was intentional, and his claim that it was for “routine maintenance” or “sustainability assessment” has been disputed.

“It is now apparent that this was a deliberate tactic to give an advantage to its rivals, leading to superior performance and price exploitation against Nigerians.” they said.

Ojulari’s actions and decisions seem to prioritize the interests of a private refinery over the public refineries, including the Port Harcourt Refinery.

They claim that the refinery was shut down despite spending billions of dollars on its revamp, which could have been allowed to continue running while the review process was ongoing.