Regarding the upcoming implementation of the revised petroleum pricing guidelines, the Africa Centre for Energy Policy (ACEP) has requested that oil marketing companies and Bulk Oil Import, Distribution, and Export Companies (BIDECs) file a lawsuit against the National Petroleum Authority (NPA).

The industry has objected to the new pricing guidelines, which among other things establish a price floor for petroleum products below which Liquefied Petroleum Gas (LPG) companies and oil marketing companies cannot price their products.

“ACEP remains committed to advocating for a well-regulated downstream sector that prioritises competition, product quality, and consumer protection. We urge OMCs and BIDECs, who are committed to improved and cost-effective service delivery, to fight such illegal regulations and proceed to court to avert regulatory sabotage of genuine business efforts. ACEP will support any such challenge and demand accountability from the NPA in the public interest.”

According to the energy think tank, the NPA’s decision represents a growing inadequacy of regulations in safeguarding the industry and consumers. This has resulted in the introduction of unauthorized and inferior products into the market, tax revenue theft by certain oil and gas companies, onerous passthrough levies and charges on to consumers, and anti-competitive business practices.

“Rather than addressing the aforementioned challenges, the NPA is opting for a “lazy” solution that rewards inefficiency, discourages competition and punishes the consumer at the pump. Setting price floors creates a system that benefits OMCs and Bulk Oil Import, Distribution, and Export Companies (BIDECs), which have a weaker market presence and are struggling to sell volumes at competitive rates. This protectionist policy is detrimental to creativity and competitive business strategy and ultimately harms consumer welfare”, ACEP mentioned in a statement.