The implementation committee of the Federal Government on the sales of crude oil and refined products in Naira has given insight into why government unbundled the monopoly of the Nigeria National Petroleum Corporation Limited (NNPCL) to allow independent petroleum product marketers to purchase Premium Motor Spirit popularly called petrol, directly from local refineries.
The Committee said that direct purchasing mechanism will allow marketers to negotiate commercial terms directly with the refineries, foster a more competitive market and enable smoother supply chain environment.
The Committee which is chaired by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, gave the update after its second review meeting that was on Wednesday.
Also, the minister in a statement on Friday, said that the meeting focused on assessing the transition towards a deregulated market structure for Premium Motor Spirit (PMS) and addressing the change in the purchasing model for petroleum product marketers.
“The most significant change under the new regime is that petroleum product marketers can now purchase PMS directly from local refineries.
“This marks a departure from the previous arrangement where the Nigerian National Petroleum Corporation (NNPCL) served as the sole purchaser and distributor of PMS from the refineries,” Edun said in the statement that was posted the X account of the Federal Ministry of Finance.
He added that the objective is to allow for a free market environment characterized by healthy competition.
“This direct purchasing mechanism allows marketers to negotiate commercial terms directly with the refineries, fostering a more competitive market environment and enabling a smoother supply chain for petroleum products,” the statement said.
The Minister further stressed that with the commencement of local PMS production, the market is better equipped to support these direct transactions.
“This transition is expected to enhance efficiency in product availability and stabilise market conditions for the benefit of all Nigerians,” he said.
The Committee, the statement also noted, recognised that there are questions and discussions regarding this change in the market structure.
“We are committed to providing clarity on this development and will continue to engage with stakeholders to ensure a seamless transition process,” the minister stated.
