The Federal Government on Thursday explained why it would not deregulate the downstream sector of the petroleum industry.
It said any attempt to do that will lead to an increase in the prices of petroleum products, especially Premium Motor Spirit (PMS).
The Acting President Yemi Osibanjo made this known during the 2017 African Modular Refinery Discussion, organised by the Modular Refiners Association of Nigeria (MRAN).
According to him, the action would have serious negative consequences for the country.
Osinbajo also chided the government’s involvement for the failure and near collapse of the Kaduna, Warri and Port Harcourt refineries.
He stated that in ensuring increased communities participation, people of the Niger Delta should not feel a sense of entitlement of participation.
“They are entitled not because they live in the Niger Delta, but they are entitled to it because they also have the brains, the resources to be able to make it happen and this is what I have seen from my engagement with people in the Niger Delta, they themselves are bringing in the investors; they themselves are talking to private investors, locally and internationally and they are bringing them here,” Osinbajo noted.
Speaking, the Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu noted that at At present, Nigeria has a refining gap of about 900,000bpd to meet the daily national consumption.
He said the government had reached a conclusion that it would focus on moderating the sector and would continue to intervene to ensure it creates a balance.
He said, “There are those who are saying we need to deregulate fully. Why are they saying that; it is because if we do not deregulate, it is not cost effective for those who are producing PMS to sell. At the same time, if you deregulate completely, prices of everything else is going to go up.
“So there are those complications, meaning we got to moderate all those things; the government has to come in at certain extent and this is what is currently going on to try and balance things up, because we cannot have, just overnight, another massive deregulation. If you do that obviously, the consequences would be very dire for the economy.”
On the failures of the country’s existing refineries in Kaduna, Warri and Port Harcourt, Osinbajo stated that the Federal Government had also ruled out building and managing refineries, declaring that it would only create the atmosphere for private players.
He said, “Government cannot just go and be setting up refineries. If the government sets up refineries and uses its people to run it, it won’t work. We have good examples in all the refineries that we have seen. If you look at the refineries we have today, Warri, Port Harcourt and Kaduna, the primary reason they are not working today is that they are government-run.
“Government cannot do business. Government business is to create the enabling environment for business. And then the government would put some investment into it. The government should not be in the business of setting up refineries all over the place; that is just a waste of time and resources.”
Commenti