Analysts Bullish as New Opportunities Open in Petroleum Marketing Business

Peter Uzoho

Economic policy analysts and operators in the petroleum marketing business have projected a brighter future for players in the supply and distribution of petroleum products following the removal of petrol subsidy that marked the deregulation of the downstream sector.

Some of the analysts and oil industry experts, who spoke to THISDAY, said the swift removal of petrol subsidy by President Bola Tinubu has opened a vista of opportunities for both the existing players and investors and as well as the potential ones.

During his inaugural speech on May 29, Tinubu had said that “subsidy is gone”, a statement that immediately triggered the change of petrol marketing dynamics in Nigeria and was immediately followed with upward adjustment in petrol prices nation-wide.

Private marketers and the Nigerian National Petroleum Company Limited (NNPC) are now selling petrol at filling stations at prices reflecting the principle of market forces. The least pump price at NNPC stations is now N488 per litre and the highest N577, while that of the private marketers are slightly different.

However, in an email response to THISDAY’s questions on how marketers would fair under this deregulated petrol pricing regime, Partner and Head of Energy and Natural Resources, KPMG Professional Services, Mr. Ayo Salami, said that marketers would experience a brighter future in their business.

Salami maintained that marketing companies should be excited about the news around the commencement of the deregulation of the sector, adding that the subsidy regime stifled innovation and curtailed their ability to compete and expand.

He said the downstream players had no flexibility in pricing their products, which limited headroom to enhance profitability.

Executive Vice Chairman, ND Western Nigeria Limited, Dr Layi Fatona, opined that the removal of subsidy on petrol has reduced the limitations facing the downstream sector.

Fatona added that marketers and the downstream investors should expect a decent reward for investment in domestic refining of petroleum products.

“This is the right time for those right and qualified investors to be prepared to take on the responsibilities presented by these new investment opportunities in the interest of Nigeria and our society, ” he said.