Dr. Emmanuel Ibe Kachikwu |
Stakeholders
in the Nigeria’s oil and gas sector have identified full deregulation of the downstream
sub-sector as the best option to attract investors and save the country from
fuel supply challenges.
Deregulation
will herald free market regime, where the forces of demand and supply will
dictate price, and free government’s interference and price fixing. The
stakeholders, which included the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu; Chairman,
Integrated Oil and Gas Limited, Captain
Emmanuel Iheanacho; and former
Executive Secretary of the Petroleum Products Pricing Regulatory Agency
(PPPRA), Reginald Stanley, at
different fora in Lagos emphasized the need for quick deregulation of the
subsector.
Speaking on the Federal Government’s goal is to deregulate the downstream sector of the petroleum industry, Kachikwu said though the government is not there yet, it will continue to fine-tune the process until the goal is achieved.
Dr. Kachikwu
said: “At every given time in the history of every
country, you will always have partial deregulation. The reason being that you
have to catch up each time and make an amendment, and even if it is just one
day, you might have some level of subsidy for that one or two days before it is
removed.
“What
is important is the goal post; where are we headed? Where we are headed is to
try and free the industry, so that it makes its own rules, set its own prices
itself. There are few mechanics that we still need to get in place properly. We
can’t forget the fact that we still have foreign exchange challenges and that
income to government is still very tight. You still have to find a way to
balance that. But what is important is what the objective is. The objective is
still to fully deregulate to find private capital to get them to where they
should be.”
Speaking
with energy reporters in Lagos at weekend, Iheanacho argued that full
deregulation of the downstream sector remained the best option to attract
investors for market development. He said full liberalisation and deregulation
of Nigeria’s downstream oil sector, with the removal of all hindrances and
bottlenecks are needed for the improvement of private investment and market
competitiveness.
He said: “We
should note that there is no provision of subsidy payment in the 2017 budget,
which calls for government to fully deregulate the downstream sector to attract
investors. We need full deregulation of the downstream sector. We do not need
partial deregulation. I do not understand the so-called price modulation we are
seeing and how it can work because presently, it is not working.”
Iheanacho
appealed to government for payment of huge outstanding subsidy funds owed
marketers for imported petroleum products, which ran into billions of naira. He
said that marketers are rattled with the huge amount being paid as interests to
banks whenever there was any delay in the payment of the subsidy.
No comments:
Post a Comment