LCCI: NNPC’s downstream oil sector monopoly stultifies growth

  • Apr 15, 2019
  • The Nation

The Lagos Chamber of Commerce and Industry (LCCI) at the weekend expressed worry over the monopoly of the downstream oil sector by the Nigerian National Petroleum Corporation (NNPC). It said the development has stifled the growth of the sub-sector.

LCCI said the state-run oil firm now solely produces and imports the petrol that runs the engine of the local economy.

Its Director-General, Mr. Muda Yusuf, said it has become practically impossible for private sector marketers to import and sell products because of the price distortions which the involvement of the state oil firm has created in the industry.

He argued that the extant policy on petrol pricing has made it impossible for private sector participants to get involved in neither fuel importation nor local refining by way of setting up refineries in the country.

Yusuf also expressed concerns over the involvement of Marine Police in the clearance of cargo at the ports. According to him, the Chamber has been inundated with reports of frequent obstruction of the release of cargo by Maritime Police even when the release has been duly authorised by statutory agencies charged with the responsibility of cargo examination.

He said their involvement in the cargo release process is a needless duplication, causing avoidable delays and huge demurrage payment by importers. He stressed that the frequent blocking of cargo by the Maritime Police is undermining the ease of doing business policy of the Federal Government.

He said: “The challenges of clearing cargoes at Lagos ports have persisted apart from the problem of poor access roads to the ports and the associated traffic gridlock; there are concerns about the several units of the Nigeria Customs Service getting involved in cargo interception and clearance processes, creating problems for importers and investors. These units include Comptroller General’s Strike Force, Comptroller General’s Task Force, Federal Operations Unit (FOU), Customs Intelligence Unit (CIU) and Comptroller-General’s Monitoring Team. Others are Enforcement Unit and CAC squad.”

He regretted that in addition to the officially approved agencies which have statutory functions for cargo examination and release such as the Customs officers of the command, National Drug Law Enforcement Agency (NDLEA), Directorate of State Security (DSS), Ports Police, Nigeria Immigration Service (NIS), Nigeria Ports Authority (NPA), Nigeria Maritime Administration and Safety Agency (NIMASA) and Port Health.

He sought the urgent intervention of Federal Government to stop the disruption the numerous Customs units are creating for importers, within and outside the ports. This practice is a negation of the ease of doing business agenda of the government and it is hurting investors, he added.

He said such delay leads to huge demurrage by importers to shipping companies and terminal operators and also affects the production cycle of manufacturers with implications for cost escalation. He urged the Inspector-General of Police to urgently intervene to redress the situation in the interest of the economy.

Yusuf urged government to prioritise reform in the oil and gas sector; pass the Petroleum Industry Bill (PIB) into law; fix the power sector; give due priority to infrastructure; address security issues in parts of the country; reduce cost of governance; and resolve the Apapa traffic gridlock which is taking a huge toll on the economy.