Gas Expansion programme: IPMAN ex-President urges downstream players to invest for future

 The former president of Independent Petroleum Marketers Association of Nigeria (IPMAN), Tunji Adeniji has urged downstream players to plan for the future amidst federal government gas expansion programme in the sector.

Speaking with Nigerian NewsDirect, the IPMAN former boss expressed that downstream investors failed to invest adequately because everything requires preparation.

According to him, “The Nigerian downstream sector is peculiar in a way, that a huge investment went into tank farms in the late 80s and early 90s but where are they all today.

“The reason is not farfetched, as excessive nature of the entrepreneur and flamboyancy. That was an era when subsidy was subsidy with all its peculiarities. What I mean is that people are excessive and they can’t set their limit.

“Money comes in anyhow, they spend it anyhow and that’s why you have 75 per cent of tank farms in Lagos in arm cup.”

Commenting on the obsolete nature of the tank farms in the sector, he said “ 8-10 years from today, nobody will use petrol, and nobody will use diesel.

“They become a wasteful asset and that’s part of the problem. Majority of the entrepreneurs did not look into the future even though, the regulation is been looked back ahead, but do they prepare?

“In Nigeria, we flare gas but the gas we flare now is what we are going to use now as a national asset because we have a great reserve of gas which we have not annex at all before.

“To survive that downstream sector, it requires a lot of discipline, it requires a lot of planning and I tell you, when you look deep into the future and you invest your money, you will reap it.

“NIPCO for instance, they invested into gas in the last twelve years, they are reaping the investment now even though the challenges are enormous.”

He disclosed that the subsidy regime in Nigeria brought a lot of money, investors were excessive,  lacked focused, so they derailed.

He explained that, “For investors to raise funds for the business and the future, he said “the way you see it is not the way I look at it. Then, subsidy administration, they set stages, over which the efficiency you run will determine your profitability, so your success is in your hand.

“You put in averagely about 580 to about 6 hundred million to access about 6 billion transactions with the bank.

“Equity is normal in banking but we play into government terms and people are duly penalized for doing the wrong thing. That is normal because, there are settlements.

“We thank God we have gone off that in Nigeria today, subsidy is a thing of the past. For those who could not manage themselves at this regime that time, they can’t survive now.”

Speaking on the gas expansion, Tunji explained that it is a laudable project, expansive and it is the only thing limiting product. It is a large product that remains for Nigerians.

According to him, “How many people can afford N250 per litre, per PMS. No need to bother yourself because if ordinarily with the heating, the increase in heating in Europe and America, by December, January, February, price of crude is likely to move up because of the increase in demand and at this time, crude prices will want to move up and the plant of white product will fall.

“Absolutely, pump prices of product, have deregulated in this country, will be very high by 220-250 per litre. You will be a crazy man to follow suite but you will be a nice man and a very smart boy to have converted your vehicle dual purpose, you will use gas.

“I can assure you that you gain a lot of money, you save a lot of money when you use gas as compared to petrol. With the gas expansion programme of Mr. President now, it has opened the eye of all of us in downstream to an enormous investment.

“Government has placed about N250 billion to pushing that effect to provide that fund for people to access but that fund is prohibited. Accessing it is not going to be easy except they review that platform because they are using the same platform we are using for agric for oil and gas. The equipment will take everything because of the cost of the equipment. The dollar content of the equipment has been a big challenge to investors in this era.”