The Independent Petroleum Marketers Association of Nigeria (lPMAN) has attributed the high cost of petroleum products in the country to the over 600 per cent increase in tariffs by the Nigerian Midstream and Downstream Petroleum Regulatory (NMDPRA) between 2020 and 2023.
National President of IPMAN, Alhaji Debo Ahmed, in a statement on Tuesday, said the arbitrary and excessive nature of the price hike not only discourages potential investors but also creates barriers for new investors seeking entry, thus applacing a burden on existing businesses.
According to him, the resulting increased costs are eventually transferred to consumers and the public.
“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,” the statement read in part.
Citing an example, Ahmed said the cost of calibration per tank, which was previously set at N20,000, had been increased to N150,000 per tank, an increase of at least 650 per cent, just as the cost of pressure testing, formerly N20,000 per tank, had also risen to N150,000 per tank.
He further noted that renewing a license for an existing station could now exceed N2 million, while new stations may face expenses surpassing N4 million.
The IPMAN president pointed out that the combined impact of these tariff hikes is placing substantial financial strains on both existing and new fuel stations.
Ahmed also expressed concern over a newly imposed 5 per cent tax on the sales or acquisition of a filling station, saying this tax could potentially discourage sales, mergers, and acquisitions within the industry.
He further pointed out that these tariff increases run counter to the objectives of deregulation, which aims to attract more investors, open the market, ensure product availability, and provide consumers with more choices.