…Calls for genuine lubricants and avoidance of counterfeited products.
…Landing cost of PMS was N1, 117/ litre, diesel N1, 157/litre, aviation fuel N1, 127/litre.
-Felix Douglas
The Major Energies Marketers Association of Nigeria (MEMAN) had its quarterly press engagement on ‘Lubricant Counterfeiting and Mitigations’ and ‘Supply Diversity and Competition.’
Giving his insight on lubricant and counterfeiting, Steve Ezendiokwere, Chairman, Lubricant Committee, MEMAN/Manager, Commercial Lubricant Sales and Field Engineering Services of 11PLC, explained the usefulness of lubricant on vehicles, trucks and heavy machineries including its importance.
According to Ezendiokwere, lubricant is the life-blood of an engine and should not be compromised with counterfeit products which can jeopardise it. He stated further that local mechanics have been trained and enlightened on the use of genuine lubricant and how counterfeit can be detected including measures to avert it. He advised vehicle owners and mechanics to destroy used empty cans which can be bought by unscrupulous people to refill counterfeited products and re-sell to unsuspected users with the original lubricant cans.
On his part, the Executive Secretary of MEMAN, Clement Isong, harped on why genuine lubricants should be used by vehicle owners because it gives longevity and durability to the engines. It is a culture that must be adopted to keep engine in sound condition.
However, stringent quality assurance measures are essential to address the prevalence of counterfeit lubricants. Collaboration with stakeholders, enhanced monitoring, and stronger regulation are necessary to ensure rigorous quality control through regular inspections and certifications. Public awareness campaigns should educate consumers on the dangers of counterfeit lubricants and promote verified products. Partnering with law enforcement to prosecute counterfeiters and implementing stricter penalties are also crucial. Leveraging advanced technologies for tracking and authenticating genuine products and encouraging innovative solutions to detect and prevent counterfeiting will further strengthen these efforts.
On the aspect of supply diversity and competition, Bello Rabiu, Independent Consultant and former Chief Operating Officer, Upstream at the Nigeria National Petroleum Company Limited (NNPCL), was of the view that promoting supply diversity enhances competition in the petroleum industry, which is supported by effectively implementing the Petroleum Industry Act (PIA) 2021 to streamline operations and reduce costs in refining or importing petroleum products.
According to Rabiu, “With consumption capacity estimated at about One Million MT (1.341 billion Litres) of Premium Motor Spirit (PMS) every month, currently being supplied through DSDP importation program of NNPCL whereby local and international traders are contracted to lift Nigerian crude oil owned by NNPCL and deliver petroleum products of equivalent value to Lagos.”
“This remains the only supply source of PMS in the Nigerian market due to inability of other players to secure Foreign Exchange (FX) for direct importation. Thus, NNPCL is effectively the only supplier of PMS in Nigeria today.”
Being the only supplier and importer of PMS in Nigeria, NNPCL is currently the determinant of PMS price as other players are only adding their margins to arrive at pump price depending on location.
These include: reception jetties, lightering through ship to ship transfer, storage through coastal, depots, transportation to retail stations and bulk marketing and retailing.
It was also revealed that landing cost of PMS was N1, 117/ litre, diesel N1, 157/litre, while that of aviation fuel was N1, 127/litre.
Isong said the costs were obtained from independent energy price benchmark providers and would release similar information regularly to keep Nigerians informed.
Speaking on ‘Issues in Local Supply of Refined Petroleum Products’, Dr. Abiodun Adedipe, Founder and Chief Consultant of B. Adedipe Associates Limited, cautioned that recriminations should be set aside while the economy needs urgent fixing moving forward.
Marketers should ensure transparency and competition without monopoly in importation and domestic production.
Dr. Adedipe added that all stakeholders have to take responsibility for their roles in the value chain by not passing bulk, aggressively pursuing energy diversification for the country.
It is key to engage stakeholders to ensure cost recovery for refiners and PMS importers, resisting anti-competitive practices, and enforcing fair competition through Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA) and Federal Competition Consumer Protection Commission (FCCPC). Transparency in the downstream value chain and managing price volatility through monthly guided prices are crucial.
Repositioning and adequately funding NNPCL Pipelines and Storage under a PPP arrangement, encouraging alternative energy sources like Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG), and Electric Vehicles (EVs), and recognizing the impact of the Dangote Refinery in the deregulation process are also essential.
There should be an increase in local refining and addressing challenge of insufficient locally sourced feedstock for domestic refineries.
Recommendations
Experts and energy editors recommend recognizing the interconnected roles of various industry stakeholders, including oil producers, refiners, marketers, transporters, consumers, media, NGOs, and development partners. They advocate for periodic, all inclusive industry stakeholder meetings to keep the industry informed on various issues.
Promoting sustainability, transparency, compliance, and fair practices, as well as encouraging the private sector to develop and share benchmarks for the landed costs of major crude oil products and other relevant market parameters, are also essential. Additionally, supporting the expansion of the industry with local refineries and fostering collaboration for growth is crucial for the sustainability and economic growth of the energy industry.
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