The Independent Petroleum Marketers Association of Nigeria (lPMAN) has said that the over 600% increase in tariffs from the Nigerian Midstream and Downstream Petroleum Regulatory (NMDPRA) between 2020 and 2023 is partly responsible for the current rising cost of petroleum products in the country.
The marketers’ group, in a statement issued on Tuesday and signed by the National President, Alhaji Debo Ahmed, pointed out that arbitrary price hike did not only discourage potential investors in the downstream subsector of the petroleum industry but also created barriers for existing operators.
The top marketer pointed out that the resulting increased costs were ultimately transferred to consumers to keep the businesses of marketers going.
The IPMAN boss clarified: “Those that are already in the business will pass the burden to the consuming public and this affects the cost of products.
“I think NMDPRA, as an agent to the Federal Government, should advise them on the way to succeed on this removal of oil subsidy.
“Between 2020 and 2023, NMDPRA had increased some, if not all, of its operational tariffs to over 600% and added other unnecessary tariffs, generating lines to the already existing ones”, he added.
Ahmed cited an example in which the calibration cost per tank, previously costing N20,000, had increased to N150,000 per tank, representing a 650% increase, as well as the price for pressure testing, which increased from N20,000 per tank to N150,000 per tank to justify the association’s position on the rising prices of petroleum products.
While stressing that the combined impact of these tariff hikes is placing substantial financial strains on both existing and new fuel stations, the IPMAN leader projected that renewing a licecse for an existing station could now exceed N2 million, while new stations may face expenses surpassing N4 million.
Ahmed cited the newly imposed 5% tax on the sales or acquisition of a filling station as another fiscal measure that could potentially discourage sales, mergers, and acquisitions within the industry, lamenting that these tariff increases run counter to the objectives of upstream market deregulation aimed at attracting more investors, open the market, ensure product availability, and provide consumers with options, among others.
