It's a 'lazy' solution - ACEP calls out NPA over new pricing guidelines

The Africa Centre for Energy Policy (ACEP) has called on oil marketing companies and Bulk Oil Import, Distribution, and Export Companies (BIDECs) to pursue legal action against the National Petroleum Authority (NPA) over its planned implementation of amended petroleum pricing guidelines.

The new guidelines, which include setting a price floor for petroleum products have sparked opposition from industry players.

ACEP emphasised its commitment to advocating a well-regulated downstream sector prioritising competition, product quality, and consumer protection.

The energy think-tank urged OMCs and BIDECs dedicated to improved service delivery to challenge what it deemed as illegal regulations and seek recourse through the courts.

"ACEP remains committed to advocating 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.”

ACEP underscored concerns about regulatory failure to protect consumers and the industry, citing issues such as the influx of illicit products, tax revenue theft, and burdensome charges passed on to consumers.

It criticised the NPA's approach as "lazy," arguing that price floors reward inefficiency, stifle competition, and harm consumers.

ACEP called on the NPA to adopt a more targeted regulatory approach focused on enforcing progressive rules and addressing unfair practices without hindering business innovation.

“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 said in a statement.