Mr Okechukwu Enelamah, former Minister of Industry, Trade and Investment has said that, the full deregulation of the petroleum downstream sector would allow the industry to reach its full potential.
Enelamah also 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 News Agency of Nigeria (NAN) reports that Enelamah spoke at the 18th Annual Memorial Lecture of Chief Aret Adams, the first Group Managing Director of the Nigerian National Petroleum Corporation (NNPC).
The lecture had as its theme: “Total Deregulation of Nigeria’s Downstream Oil and Gas Sector: Challenges and Opportunities.”
The former minister, who chaired the lecture, said a lot of capital would be freed up for developmental purposes if the sector was fully deregulated.
He noted 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.
Delivering his lecture, Mr Tunji Oyebanji, Chairman, Major Oil Marketers Association of Nigeria (MOMAN), said Nigeria lost $13 billon in 2019 to non-functional refineries.
Oyebanji noted that if the four NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.
He said : “Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space.
“Total deregulation is more than just the removal of price subsidies, it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain and resulting in the growth in the nation’s downstream petroleum sector as a whole.”
Oyebanji said that though the government had announced the removal of petrol subsidy in March 2020, with the price of crude oil above $60 per barrel, the N162 the product was currently being sold was below the landing cost.
He said NNPC as the sole importer of petroleum products was currently defraying the cost through ‘under recovery”, stressing that this was not sustainable in the long run.
The MOMAN chairman also disclosed that Nigeria had the cheapest fuel price among its African neighbours, which encouraged smuggling of the product across its borders.
He said deregulation would increase more investment especially with the taking off of the African Continental Free Trade Agreement (AfCFTA) which would give Nigerian businesses opportunities to expand.
Oyebanji said the coming of stream of the 650,000BPD Dangote Refinery, Bua Group Refinery, Waltersmith Refinery and others would transform Nigeria into a net exporter of crude oil in the near future.
In his address of welcome, Mr Charles Osezua, Chairman, Board of Trustees, Aret Adams Foundation, said the late NNPC boss had over 32 years ago championed the campaign for full deregulation of the downstream sector.
“Aret fought for the removal of subsidy and wanted to release the creative and entrepreneurial capacities of Nigerians.
“There was resistance which led to his removal as the GMD which was termed ‘national interest’, but 32 years later, the discussion of subsidy removal remains topical and emotive, ” Osezua said.