Complete downstream oil deregulation is going to free production resources
At the 18th annual memorial lecture 2021 series of Chief Aret Adams, major oil marketers and other stakeholders in the oil and gas sector again reinforced their demand and the need for total deregulation of the downstream sector to provide the right market template for investors and ensure maximization of investments.
The stakeholders who spoke at the virtual event said deregulation was critical to the viability and sustainability of existing and planned refineries.
The lecture was tagged: “Total Deregulation of Nigeria’s Downstream Oil and Gas Sector: Challenges and Opportunities.”
They noted that “As for the issue of the price of petrol, it is a work in progress. The federal government, governors and the NNPC are to discuss and
find a solution to the issue of right pricing for petrol in the country.”
In his opening remarks, Mr Okechukwu Enelamah, a former Minister of Industry, Trade and Investment, aligned with the summation of full deregulation of the petroleum downstream sector to allow the industry to reach its full potential.
Enelamah, who also chaired the lecture, advised the federal government to look for a win-win solution to the issue of removal of petrol subsidy, being the right thing to do from an economic perspective.
The former Minister said a lot of capital would be freed up for developmental purposes if the sector was fully deregulated.
He also said that the deregulation of the telecommunications sector which had transformed to a $20 billion industry in less than 20 years was a pointer that same could be achieved in the petroleum sector.
According to him, true competition, independent market regulator, consumer protection and investor protection are some of the factors that can help achieve a fully deregulated petroleum sector.
Enelamah, who is also a co-founder/ Chairman of African Capital Alliance said full deregulation of the downstream sector would protect customers’ right, anti-monopoly and price- fixing rules in place.
He said that would also bring about robust protection of investors’ rights and framework for creating stable and enforcement of regulations.
Delivering his lecture, Mr Tunji Oyebanji, Chairman, Major Oil Marketers Association of Nigeria (MOMAN), said that total deregulation of the downstream had immensed opportunities that would increase the country’s local refining capacity.
Oyebanji said that if the sector if fully deregulated, it would increase investment in the rehabilitation and maintenance of industry infrastructure, storage facilities, pipelines, trucks etc.
He said that would also fast-track development of open access reception facilities and adoption of industry best practices.
On the future of the downstream, Oyebanji said that there was need to be a balance between ensuring the sustainability growth of the crude oil value chain( Upstream through downstream) an providing value for the Nigeria consumer and the Nigerian economy.
He said that the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop itself.
According to him, there is need for sustainable liberalisation of the downstream sector. rehabilitation of infrastructures and accountability.
On the state of the country’s refineries, the MOMAN chairman said that Nigeria lost $13 billon in 2019 to non-functional refineries.