28 October 2015, Lagos – Operators in the downstream sector of the oil and gas industry have restated their opposition to the regulation of the sector by the federal government.
This is coming as Integrated Oil and Gas Limited has been granted an approval by the federal government to build a private modular refinery.
Speaking on Tuesday in Lagos at the ongoing ninth Oil Trading and Logistics (OTL) conference, the operators argued that the potentials in the downstream could only be unlocked in a deregulated environment.
Addressing the conference, a former Minister of Interior and Chairman of Integrated Oil and Gas Limited, Capt. Emmanuel Ihenacho, said there was an urgent need for the restructuring of the downstream sector.
“One of the key issues today is whether or not we will continue to regulate the prices. Fuel subsidy is good if only it can deliver cheap energy to the poor people for whom it is targetted. But how many poor people drive into the filling station and buy cheap fuel? The answer is none because it is only the rich that drive into filling stations,” Ihenacho said.
Ihenacho further stated that his company has been granted licence to build 20,000 barrels per day modular refinery in Lagos.
Ihenacho said the refinery would be competitive as the transport cost of shipping crude oil abroad and bringing back the petroleum products would be eliminated.
Also speaking, the Managing Director of Mobil Oil Nigeria Plc, Mr. Tunji Oyebanji insisted that the giant giant in the downstream could only be unleashed in a deregulated and competitive environment.
“That is what is holding us back. Nigerian cannot be an island. The world is moving in a particular direction where the market is deregulated and competitive. The poor people we think we are protecting with subsidy are actually being shortchanged because of the huge loss to the economy,” he explained.
He said the only reason why Nigeria continued to move in a different direction from the rest of the world was because the country has oil to finance business in such manner.
Also speaking, the Managing Director of Rainoil Limited, Mr. Gabriel Ogbechie, noted that regulation has created challenges of funding, payment of subsidy, infrastructure and foreign exchange issues for the operators.
In her speech, a representative of the Group Managing Director of NNPC, Mrs. Aisha Katagun stated that the government would streamline subsidy management and redirect it to benefit the poor, adding that the NNPC has a zero tolerance for corruption.
Executive Vice-Chairman of Technoil Limited, Mrs. Nkechi Obi thanked the organisers for the success of the yearly conference.
Chairman of OTL Conference, Mr. Emeka Akabogu, said the OTL Week was focused essentially on aggregating the value chain for downstream oil and gas.
A former President of African Refiners Association and retired NNPC’s Group Executive Director in charge of Refining and Petrochemicals, Mr. Tony Ogbuigwe said subsidies were not sustainable, adding that the current low oil price regime is the best time to deregulate.
- This Day