Again, stakeholders ask for full downstream deregulation to push investment
As business activities begins to take shape in 2017, stakeholders in the Nigeria’s oil and gas sector have identified full deregulation of the downstream subsector as the best option to hurl foreign direct investment (FDI).
In their submission, deregulation will herald free market regime, where the forces of demand and supply will dictate price, and free government’s interference and price fixing.
Leading the group Chairman, Integrated Oil and Gas Limited, Capt. Emmanuel Iheanacho and former Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Reginald Stanley.
Speaking at different conferences in Lagos, they argued that the volume of opportunities in oil and gas sector will remain locked up until federal government goes for full deregulation in the downstream petroleum sector.
Explaining why it has become very important that Nigeria’s downstream sector, the Minister of State for petroleum, Dr. Ibe Kachikwu said “the Federal Government’s goal is to deregulate the downstream sector of the petroleum industry, but the process is still being fine-tuned”.
“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 make do 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.”
Sounding similar tune, Capt. Iheanacho argued that full deregulation of the downstream sector remained the best option to attract investors for market development.
“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”.
“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.
He further appealed to government for payment of huge outstanding subsidy funds owed marketers for imported petroleum products, which ran into billions of naira.
According to him, “Mrketers are rattled with the huge amount being paid as interests to banks whenever there was any delay in the payment of the subsidy”.
