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LCCI fears lack of clarity on deregulation, liberalization of the oil sector

The Director-General of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf has expressed fears on the manner of ongoing deregulation and liberalization of the oil and gas sector and urged the Federal Government to raise the clarity level of all its dealings in the process.

He said government should liberalise the downstream petroleum sector for unfettered private sector participation and investment, while ensuring that the refineries are operated as commercial business entities.

However, for the whole effort to be error free and meet world best practices, Yusuf said “the approach should be subjected to appropriate regulatory framework that defines the role of NNPC, while a model that would allow for a level playing field for all operators including the NNPC should be adopted”.

“We have concerns over lack of clarity on the deregulation and liberalization of the sector. This policy lacuna has put many investments in the sector at risk; while many other investment decisions have been put on hold.

The Department of Petroleum Resources (DPR) has earlier argued that growing the domestic refining capacity in a well deregulated scenario would reduce the dependence on foreign products, boost local content, generate new jobs and develop requisite competencies in the ancillary sectors. “It would also free the foreign exchange market from undue demand pressures of petroleum products imports,” it added.

The agency said the future of the domestic refinery sector would be greatly improved through policy consistency, secured crude oil supplies and improved infrastructure. “Government is committed to tackling all the associated challenges facing the effective development of the domestic refinery sub-sector by promoting the business-friendly environment that is capable of driving the growth that will ensure the emergence of Nigeria as a refining hub in Africa,” it added.

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