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The Federal Government has given insight into why it is dragging its foot regarding the total deregulation of the downstream sector of the petroleum industry, saying President Muhammadu Buhari is rather more concerned about the attendant effect of the price of the product on the poor consumers when the product is deregulated fully.
Laolu Akande, senior special assistant to the President, said on Channel’s Sunrise programme at the weekend that there were issues around full deregulation of petrol and cost, especially now that the price of crude oil had gone up.
“This would affect the cost of doing business,” adding that “the President would rather prefer to protect the majority of the down trodden Nigerians that use the product for transportations and other economic activities,” he said.
But Muda Yusuf, director-general, Lagos Chambers of Commerce and Industr (LCCI), said there would not be any serious investment in the downstream except it was totally deregulated.
According to Yusuf, deregulation of the downstream of the petroleum sector is a major reform that needs to happen if this economy must make reasonable progress. This, he said, cannot happen now because the sector has become the drain pipe of the economy, as the government is throwing a lot of resources into it.
The government, he explained, is neck deep in the downstream sector of the oil and gas industry, and the only way to clean the sector is for her to get out of the sector.
He stated that not deregulating the downstream had become a political issue coupled with the fact that there were very strong vested interests.
The LCCI boss, who was also on the Channels programme, said there was the issue of what would be the price of petrol “if the government hands off the sector completely.”
A lot of resources that would have been used for development of the other sectors like education, health and even infrastructure are being wasted to subsidised petrol, he said.
Meanwhile, the Nigerian National Petroleum Corporation (NNPC) says it imported 9.8 million metric tons of petrol worth $5.8 billion to combat the fuel crisis that resurfaced late last year.
Maikanti Baru, group managing director, NNPC, disclosed this at a public hearing organised by the Senate Committee on Public Accounts at the National Assembly Complex in Abuja.
The NNPC boss, who was represented by the chief operating officer, finance and accounts, Abdulrazaq Isiaka, in a presentation, said it carried out the importation in fulfilment of its statutory role as supplier of last resort to ensure that Nigerians would not suffer as a result of product unavailability.
Baru stated that the provision of 9.8 million metric tons of petrol had helped a great deal in ameliorating the suffering of Nigerians.
He said the corporation’s intervention became necessary following the inability of the major and independent marketers to import the product because of the high landing cost, which made cost recovery and profitability difficult owing to the regulated price regime.
He however, pointed out that cross-border smuggling due to price disparity between Nigeria and neighbouring countries, where a litre of petrol was selling above N350 per litre as well as logistics in trucking products to different locations across the country, remained serious challenges in the quest for no queue situation in the country.
The chairman, Senate Committee on Public Accounts, Senator Matthew Uroghide, noted that the public hearing was part of the committee’s duty to find lasting solutions to the problem of fuel scarcity in order to make life easy for all Nigerians.
