A Review of the Nigerian Energy Industry

Ex-PENGASSAN boss seeks deregulation of downstream oil industry

16 December 2014, Lagos – The immediate past President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Mr. Babatunde Ogun has called on the federal government to deregulate the downstream sector of the oil and gas industry.

Ogun said the call became expedient in view of the continued fall in global price of oil. He however emphasised the need for government to put in place adequate measures to cushion the effects of the deregulation on the masses.

Fuel-queueHe equally called on the Central Bank of Nigeria (CBN) to address the falling value of the naira, which had hitherto been depriving Nigerians of benefitting from the drop in crude oil prices.

Ogun also called on the regulatory agencies to be alive to their responsibilities of protecting Nigerians against arbitrary increase of petroleum products pump prices and exploitation by marketers.

According to Ogun the best time for the deregulation of the downstream sub-sector of the nation’s oil and gas sector is now that the crude oil price is experiencing a downward trend.

Lending his voice to the call by many Nigerians including the Nigeria Labour Congress (NLC) that government should reduce the prices of refined products, he stated that the best price adjustment mechanism is the deregulation policy.

“Deregulation could have been the best automatic price adjustment mechanism that responds to the market forces without any need for intervention by the government. Just as the price of crude oil is dropping and some countries, such as United States of America (USA) adjusted the price of the Premium Motor Spirit (PMS) that is petrol from $3 to $2, the price mechanism in Nigeria should also be able to adjust to a reduction in the prices of refined products (petrol, diesel and kerosene),” he stated.

He noted that the only criterion for deregulation is that the government should put in place measures that cushion its effects on the citizenry, adding that the government needs to work on the effective and efficient implementation of the means of mass transportation, especially the rail system as well as efficient and uninterrupted power supply in the country.

The trade unionist said that with improved energy supply, there will be less dependent on fuel as alternative source of power for manufacturers and small and medium entrepreneurs, adding” there will be more jobs as the informal sector which is the fulcrum of any developing economy will be jump started.”

He argued that deregulation will also revamp the ailing downstream sector, which is almost at the verge of collapsing.

– This Day

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