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Leading indigenous oil and gas investor and Chairman, Integrated Oil and Gas Limited, Capt. Emmanuel Iheanacho, has made it clear that time has come for the Federal Government to consider a free market economy for the downstream petroleum industry, saying the current situation remained a huge deterrent to operators that are looking to investing in the refining of crude.
Giving an insight on why after several years of issuance of refining licences, many licencees are yet to show seriousness, he said “The reason many planned refineries have not come on stream many years after their initiation was because of issues bordering on bad business modeling and uncertainties in the petroleum sector.
To him, “An ideal market situation for would-be refiners in the country was needed to make their businesses profitable and sustainable, as against regulating the market, especially in terms of pricing”.
Corroborating Iheanacho’s position, the Chief Executive Officer, OVH Energy Marketing, Huub Stillman, decried that Nigeria was one of the few members of the Organisation of Petroleum Exporting Countries (OPEC) without efficient refineries.
He regretted that “Nigeria with its location, population and endowment should have efficiently working refineries”.
“There have been attempts to regulate the industry in a bid to ensure sustainability and innovative growth. However, there is an urgent need to develop Nigeria’s capacity to refine crude oil locally. This will bring about great financial and socio-economic impact not just on the petroleum industry but also on other sectors of the economy.
“This is even more critical now taking into consideration the costs of crude prices in the global marketplace, which means increase in the amount spent on importation of petroleum products.
“There is no viable refining if we do not talk about deregulation and removing fuel subsidy. As one of the biggest economies in Africa, we can justify the reason to have a viable refining industry. There is need to invest in refinery infrastructure in order to have the capacity to produce clean fuels,” Stillman averred.