Amidst the challenges posed by COVID19 pandemic and low oil prices, stakeholders in the downstream sector of the oil and gas has reiterated that total deregulation will attract huge investment to the sector, which will invariably lubricate the economy.
The Chairman, Major Oil Marketers Association of Nigeria (MOMAN), and Managing Director/Chief Executive Officer, 11Plc, Tunji Oyebanji stated this while speaking on the Nigerian Petroleum Downstream Consultative Summit Webinar.
According to him, operators are happy with moves by government to guarantee deregulation especially with the removal of fuel subsidy, but expresses the need for government to get imputes from the operators to ensure good policy formulation.
Oyebanji said that government should encourage private sector players to take over the downstream sector of the petroleum business. ’Our industry requires good system and policy formulation to attract investment. The only way we can attract a deal is to ensure a good policy that can attract investment.
He also noted that “When this is done, most of the challenges we see as regards subsidy, refineries, and others will be adequately addressed. The government should only play a regulatory and not an operational role.
He noted that it has become imperative for the government to embark on total deregulation of the downstream sector to attract investors and to also save the country from the huge amount spent on subsidy.
He expressed that the downstream needs investment and an environment where the market forces determine the prices of petroleum products. ’The key issue is that having gone this far to set a stage for deregulation of the sector by taking out the subsidy. The government should muster the courage to change the structure of the downstream sector and allow market forces to determine the prices and when this is done investors will be encouraged and have full confidence to invest in the sector.
Also speaking, Dame Winifred Akpani, Managing Director of Northwest Petroleum and Gas Company limited said it was crucial that the private sector would drive the downstream subsector, while the government would make policies and provide the enabling environment.
She added that there was an urgent need for the restructuring of the downstream sector. Stressing that deregulation is good for both the operators and the consumers.
She noted that most depot owners are owing a huge debt to banks due to government control of the downstream, but raised hope that operators will bounce back once there is total deregulation of the downstream
According to her market reflective price will also ensure healthy competition, market stability and improves fuel supply situation through private sector participation, It will also reduce hoarding, smuggling and diversion substantially and stabilise the price at the actual product price.
For Hajia Amina Maina, Group COO, MRS Holdings Ltd deregulation will create labour market stability, potentially creating new jobs through new investments in private refineries and retails and at the same time prevent the potential loss of jobs in existing investments, which were threatened in recent years.
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