The purported directive by the Minister of Aviation and Aerospace Development, Festus Keyamo, that the Federal Government has approved Dangote Refinery as the exclusive supplier of jet fuel for Nigeria’s airline operators has caused stir among downstream sector operators, raising fresh concerns about the state of Petroleum Industry Act (PIA).
Though, the Minister had refuted the report on his X handle, saying that the Airline Operators of Nigeria voluntarily decided they would patronise Dangote Refinery in their purchase of JET A1 Fuel, a few industry operators who spoke to ENERGY TIMES expressed their worries, insisting that government should not have had anything to do with such decision, directly or indirectly, moreso, now that the industry is fully deregulated which encourages the principle of willing buyer and seller.
Specifically, one of the operators who cited the PIA pointed out that the law frowns at monopoly but, rather encourages competition.
He added that the PIA discourages such unholy alliance from an association which seeks to promote the interest of a particular company.
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It was argued further that the association the Minister referred to does not have statutory powers to compel its members to patronize specific refinery or company.
Another point of concern raised is the challenge the aviation industry could face in the event that Dangote Refinery is not able to meet the market demand to supply Nigeria’s Jet A1 for whatever reason.
“We demand for a free market economy which encourages healthy competition”, another operator lamented
The operator argued that in a deregulated regime, buyers reserve the right to buy from sources they choose, while sellers also have the prerogative to decide where they get their product from.
“In any case, he posited further, “what happened when other local refineries, both private and government owned, commence production. Will the association still compel its members to patronise only Dangote as the Minister is insinuating? You cannot regulate and deregulate all at once. The government and all associations need to comply with the letters and spirit of the PIA which espouses a deregulated regime founded on competition and free market, ” he concluded.