Yemisi Izuora
The Lagos Chamber of commerce and Industry, LCCI has backed the decision of government to fully deregulate the petroleum downstream sector of the economy.
In a palliative proposals sent to federal government for quick economic recovery, the Director General, DG, of the Chamber Muda Yusuf, said the measure would ultimately reduce importation of petroleum products and ease the pressure on the foreign exchange market as well as the burden on our foreign reserves.
Oriental News Nigeria reports that the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mele Kyari, last week said Nigeria’s ailing refineries will no longer be managed by the Corporation after rehabilitation,
According to a press release by the corporation’s spokesperson, Kennie Obateru, Kyari said this in an interview on Arise TV breakfast programme, The Morning Show.
He said a company would be engaged to manage the plants on an Operations and Maintenance (O&M) basis upon the completion of the rehabilitation exercise.
The rehabilitation of the four refineries in the country have gulped billions of naira since 1999 but none of them is yet to operate at full capacity.
“We are going to get an O&M contract, NNPC won’t run it. We are going to get a firm that will guarantee that this plant would run for some time. We want to try a different model of getting this refinery to run. And we are going to apply this process for the running of the other two refineries”, he said.
He explained that the plan, ultimately, is to get private partners to invest in the refineries and get them to run on the NLNG model where the shareholders would be free to decide the fate of the refineries going forward.
Kyari said this model, which is totally different from the previous approach, would guarantee the desired outcome for the refineries.
Being one of the cardinal programmes on his agenda when he assumed office in July 2019, Kyari said the rehabilitation process was to be in progress in January and to be delivered by 2022.
Kyari’s announcement of private management of the refineries after repairs comes two days after he said the government would no longer subsidise petrol.
The NNPC has been subsidising petrol and spent over N700 billion on subsidy in 2018.
None of Nigeria’s four refineries works optimally and the country imports virtually all its petrol needs.
In the proposal, Yusuf said for the deregulation to work, complementary legal framework should be expeditiously put in place to avoid a truncation of the process.
The chamber according to him, believes that the economy would profit immensely from this very significant reform.
The DG, was confident that it will free resources for investment in critical infrastructures such as power, roads, the rail systems, health sector, education sector etc. “The deficit in all these infrastructure areas are phenomenal. Fixing infrastructure will greatly improve productivity and efficiency in the economy and impact positively on the welfare of the people.
“It will unlock the huge private investment potentials in the downstream oil sector especially in petroleum product refining.” he envisaged.
Further, Yusuf said if well implemented it will eliminate the patronage, rent seeking activities and corruption that currently characterize the downstream oil sector and create more jobs for the teeming youths of the country in the downstream oil sector as investment in the sector improves