Petroleum Sector: FG Says No to Total Deregulation

The Federal government Thursday said it has no intention to introduce total deregulation of the nation’s downstream petroleum sector.
Acting President Yemi Osinbajo who said this explained that this was because total deregulation of the oil sector would translate into increase in petroleum prices.
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 will not be cost effective for those who are producing petrol to sell.
“At the same time, if you deregulate completely, prices of everything else are going to go up. So there are those complications, meaning we’ve got to moderate all those things.
“Government has to come in at a certain level and this is what is currently going on to try and balance things, because we cannot have, just overnight, another massive deregulation.
“If you do that, obviously, the consequences would be very dire for the economy.”
Speaking at this year’s African Modular Refinery Discussion organised by the Modular Refiners Association of Nigeria (MRAN), said such policy measure could have consequences on the country.
The Acting President blamed government’s involvement in the Kaduna, Warri and Port Harcourt refineries managed by the Nigerian National Petroleum Corporation (NNPC), adding that this was the reason for their failure.
He however said the oil-producing communities will be given the opportunities to acquire stakes in the new modular refineries being championed by the government.
Osinbajo also said the federal government, states and private investors will also have stakes in the modular refineries.
On why the three refineries failed, he said, “Government cannot just go and be setting up refineries. If 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 because they are government-run.”
“Government cannot do business. Government’s business is to create the enabling environment for business. And then government would put some investment into it.
“Government should not be in the business of setting up refineries all over the place; that is just a waste of time and resources.”

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