...Lack of deregulation delays investment in refinery

The National Vice President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Alhaji Abubakar Maigandi Dankigari Wednesday explained that marketers were selling the Dual Purpose Kerosene (DPK) above pump price because they could not access it at the official pump price.He revealed that corrupt practices still characterized its sale because the product is still subsidized.

According to him, the Petroleum Products Pricing Regulatory Agency (PPPRA) pegged the price of kerosene for N135 per litre but marketers could not get it directly at the price unless they cut-corner securing it at N160 or N170 per litre.

He said the scenario was accountable for the sale of kerosene at N180 per litre.

Speaking with The Nation at Abuja, he said: "Let government deregulate that PMS and DPK because there is still some element of corruption in the sale of kerosene. I seek the deregulation of the price of kerosene because of the difficulties in accessing it.

"Masses are not enjoying it and we marketers are not enjoying it because even when you go to any government depot that you want to load DPK now, you cannot load it at the government stipulated rate until you give them money before you can load it. The government's price is N135 but you cannot get it. You can only come to town and get it for N160 and N170. That is why you see marketers selling it at N180 per liter."

Dankigari noted that IPMAN was yet to kick-start the building of its proposed modular refineries because the Federal Government was yet to deregulate the price.

He noted that had government deregulated the prices of the Premium Motor Spirit (PMS) and Dual Purpose Kerosene (DPK) as IPMAN would have approached its foreign partners for investment in the projects.

According to him, building modular refineries is a gigantic project that an individual could hardly undertake without the involvement of foreign investors.

He said: "Up to the present date, the PMS and DPK are not completely deregulated. And a project like this an individual cannot sponsor it. We will have to bring in foreign investors. And supposing the DPK and PMS are completely deregulated our foreign investors are ready to bring the money so that we can continue the business."

Dankigari, who urged the government to deregulate the pump prices of petrol and kerosene, noted that its members cannot import the products because of the devaluation of Naira which affected access to foreign exchange.

Citing an example of the benefits of full deregulation, he explained that marketers were importing diesel because government had deregulated the product.

He said: "We are importing diesel. What we are not importing is kerosene and DPK because of the present change in the value of Naira to dollar. We cannot go and import because of the rate. The government rate of kerosene is N145 per liter and PMS the government rate is N145. We can import diesel because of the liberalization.

"There is no subsidy in diesel therefore if you import, you can add your margin and sell. The market of diesel is good as most of our marketers are selling it in their pump at the rate of N180 to N190 per litre."

The National Vice Chairman said that the people can now access petrol because of the removal of subsidy which brought the pump price to N145 per liter.

He said the forces of demand and supply have reduced the PMS price in most independent petrol stations across the country.

His words: "The sale of PMS is good because there is availability of diesel, PMS and DPK. Since there is availability of products our staff are busy selling ice. A.A. Rano is selling at the rate of N141, Garima in Kubwa we selling at the rate of N142, Azman and the rest of them are selling at the rate of N142."

Continuing, he said: "We thank God that some government refineries have started functioning. Port Harcourt and Kaduna Refineries are now functioning. So they are assisting in terms of supply."

Source: http://nigerianewsnow.com.ng/2016/10/12/why-kerosene-is-above-pump-price-ipman/