Monopoly in the oil and gas logistics and supply services sector has been identified as the major factor responsible for high cost of oil production in Nigeria. Chairman of Nigerdock and Jagal Group, Anwar Jamarkani made the comment at the weekend also said the situation has added an additional $3-$5 to the production of every barrel of crude produced.
There had been reports of series of complaints of alleged monopoly and domination of the sector by one of the leading operators. Those who made such complained say government should review the laws and other directives guiding private sector operators in the maritime logistics services to ensure level playing field for all operators.
“The oil and gas supply and logistics service in Nigeria is the most expensive in the world because of this entrenched monopoly. This monopoly seriously damages the international reputation of Nigeria. The monopoly has over the last 20 years used a non-existent law to justify the assertion and false claim that “all oil and gas cargo must first be discharged at their ports of preference,” Jamarkani said this when he played host to a delegation of the Nigerian Customs Service, NCS-led by the Comptroller-General of the agency, Colonel Hameed Ali (rtd).
Jamarkani said the dominant monopoly in the Nigerian oil and gas logistics and supply services dates back to about 20 years, a situation he said is sabotaging the national economy, saying it conspires and works against any potential competitors and against Snake Island Integrated Free Zone (SIIFZ).
He argued that that the monopoly has persistently made various government institutions to compromise, maintain and entrench its monopoly with impunity in the sector. He said successive governments had also used the NSC to entrench monopoly in the industry, adding “The net effects of the monopoly’s actions are numerous. This monopoly adds extra cost of $3-$5 per barrel produced in Nigeria, which translates to over $1.5 billion per annum. This monopoly is a tollgate. They have forced the oil and gas industry and the nation into capitulation, and driven away investments from Nigeria.”
Bemoaning a situation where the customs are alleged to have been used as tool to foster monopoly in the past, Jamarkani said “The monopoly has consistently used this non-existent law to coerce the industry and service providers into dosing their bidding and thereby undermining the Nigerian economy. If this law indeed exists, the Federal Government would not have encouraged other critical players like SIIFZ to make huge investment in the country. SIIFZ and Nigerdock are open for competitive business and we are determined to bring down your operational costs by at least 30 per cent. Saying “In line with the Federal Government’s vision for free and fair competition, there is no room for the continued monopoly in Nigeria as it is sabotaging the industry and the national interest.”
In his response, Col. Ali said: “No business can grow without committed workers. You have added great value to this company. On behalf of the Federal Government, I congratulate you and appreciate what you are doing. I assure you that whatever we can do as a government to support this company, we will do it. There is need to encourage companies like this to create more employment and assure you of government’s readiness to provide the enabling environment.”