IPMAN Rejects Approval of Import Licences for Petroleum Products

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has voiced strong opposition to the recent issuance of additional import licenses for petroleum products. IPMAN argues that this move is not only exacerbating price volatility but also placing undue pressure on and weakening Nigeria's currency, the naira.

Chinedu Ukadike, the National Publicity Secretary of IPMAN, urged the federal government to conduct a transparent review of the licensing process through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). He stated that the import licenses, intended to regulate prices of domestically refined products, are failing to achieve their objective. IPMAN highlighted that some companies receiving these licenses are setting prices as high as N1,350 per liter, which is significantly more than the price offered by the Dangote refinery.

IPMAN contends that this pricing strategy defeats the government's goal of controlling domestic product prices. Ukadike explained that the price volatility directly impacts independent marketers, as the landing costs for imported products are approximately 20% higher than those from the Dangote refinery. This makes the import arrangement counterproductive, he argued, and contributes to the pressure on Nigeria's foreign exchange reserves and the naira, which has recently seen the dollar rise to around N1,400.

Consequently, this situation affects the pump price of petroleum products nationwide. IPMAN advocates for the federal government to collaborate with the presidential committee on the downstream sector to address the challenges faced by the Dangote Refinery and ensure its continued support to meet the country's product demands in naira. The association emphasized that local refining has provided a continuous and uninterrupted supply of petroleum products, a significant improvement from the past reliance on imports.

Ukadike questioned the logic of issuing import licenses that inflate prices when a stable supply is already available locally. He called for prioritizing and strengthening Nigeria's own refining capacity, including both the Dangote Refinery and government-owned facilities, as essential for the nation's energy security. IPMAN believes Nigeria should focus on its domestic refining capabilities rather than depending on imports.

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If we are having continuous and uninterrupted supply, our problem is pricing. Is it not better we sit down and see how this issue can be controlled, than signing unnecessary import licences that will further inflate the price of petroleum products in our country?