Total deregulation’ll stability in petroleum sector – Expert

CARSON, CA - AUGUST 07: The BP West Coast Products LLC Carson oil refinery on August 7, 2006 in Carson, California. BP Global is shutting down its Prudhoe Bay oil field operations, the nation?s largest, on Alaska's North Slope because of severe corrosion in an oil transit line. The shutdown will cut supplies to West Coast refineries and will drive oil and gasoline prices sharply higher, raising new criticisms of the company's safety record. British Petroleum (BP) is facing a criminal investigation over a major spill at the same oil field last March. The shutdown reduces the production on Alaska's North Slope by half and reportedly cuts daily U.S. crude production by about 8 percent. (Photo by David McNew/Getty Images)

By Benjamin Umuteme


Former Group General Manager, Corporate Planning in NNPC, Mr. Babajide Soyode, has insisted that only a total deregulation of the petroleum sector will bring stability in the sector.
Soyode, who stated in this in Abuja added in order to attract investors and curb the incessant fuel scarcity in the country deregulation was the way out.
He said that total removal of petroleum subsidy would create more competition among marketers and also address corruption associated with payment of subsidy.
According to him, it is only in Lagos State that petrol sells at N 145 per litre, while it sells above the official pump price in many parts of the country.
He said this negated the concept of subsidy payment.
“It is a shame and an embarrassment for the government to still subsidize petrol. If subsidy is removed, government will use the money to develop other sectors.
“There is need to revive the existing depots to ease distribution because if we have enough depots it reduces the stress of trucking petrol from Lagos to the northern parts of the country,” Soyode said.
He advised the federal government to emulate what was done in the telecommunications sector and apply same to this all important industry.
He said that the deregulation of the telecoms sector created competition among the operators and subsequently crashed the price of telephone and tariff by the different network operators.
“Remember that before the coming of Globacom into the telecoms sector, the early operators such as MTN and ECONET (as it was known then), had told Nigerians that it was impossible to have per second billing tariff regime.
“Any right-thinking person will vote for deregulation any day; it makes good economic sense.
“We should all support deregulation in the petroleum and gas sector because it would attract genuine investors into the sector.
“For instance, Dangote Refinery Limited will soon come on stream and we can be sure that a few modular refineries will come up if the sector is opened to investors.
“All these will bring about appropriate pricing of the product,” Soyode said.
He also said there was a need to overhaul all the country’s refineries for them to produce at optimal capacity.

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