By Emma Amaize & Henry Umoru
ABUJA â€” THE Federal Government declared yesterday that it was not going back on its arrangement to deregulate the nationâ€™s oil sector, just as it said that the Atlas Cove Jetty that was last week bombed by men of the Movement for the Emancipation of the Niger Delta (MEND) has been repaired and functioning.
However, the militants warned, yesterday, that they would revisit any oil pipeline and facility damaged during its suspended Hurricane Piper Alpha and Hurricane Moses that is repaired by the government and oil companies during the period of its 60-day self-proclaimed ceasefire.
Govt insists on degulation
According to the government, with the current events in the country, it would be very difficult to achieve any meaningful development if the oil sector was not deregulated, adding that it was due to the problems encountered with the current regulated regime that the over 18 companies licensed to build refineries have failed to take off.
Addressing members of the National Working Committee (NWC) of the Peoples Democratic Party (PDP) in Abuja yesterday at the partyâ€™s National Secretariat as part of the interactive session with Ministers, the Minister of Petroleum Resources, Dr. Rilwanu Lukman, noted that the current situation was not profitable and would scare any would-be investor in the petroleum sector because the regulated regime would not allow investors recover what they have invested.
The Minister admitted that there was a cartel which operates in the sector, making it difficult for others to come in stressed that the major task before the government was to first address those factors chasing other investors from the sector.
According to him, â€œPetroleum products are not available in the quantum and we realised that we need to satisfy the demands of our citizens. What is happening now is that there are certain group of people who cornered the market. Because other people will not do it, the price is such that people are not able to import freely.
â€œWhen we liberate the market, free the market by deregulation, it will be possible for people to bring in petroleum products freely. When they do so, there will be enough. At the beginning, there may be surge in the price; a little bit more, but when the market is freed and products are able to flow freely, the price will tend to moderate and it will most certainly go down. This is what we intend.â€
The Minister who noted that the oil sector environment was not profitable hence private refineries have taken off several months after licences were issued to them, stressed that there was the need to first get right the market forces since the regulation of the sector had made it unprofitable for private investors to come in.
â€œWe have given licence to 18 companies to build refineries but nobody has built because the market environment is such that nobody is going to bring in large sums of money running sometimes in billions and build refineries for you, pay the federation account as the NNPC is doing at international price for the crude and then sell the product into a market that is regulated and then they are not able to recover even their investment.
â€œWhen the sector is deregulated, more people will build refineries; more refined products will be available and ultimately the beneficiary is the ordinary man in the street because these products will be available at a fair price.
â€œWe have in this regard, extensively consulted with unions. Fortunately, NUPENG and PENGASSAN and of course the TUC have been consulted and they are with us. We still have a bit of challenge with the NLC but we believe when they see the facts and realise what is happening, they will come on board.
â€œThey are already more or less on board. So, the unions are fully in the picture, and they support this 100%. Equally important, we got the National Assembly to support it. We went to Senate and the House and explained to them what is happening and they all came out in support of it.
As elected representatives of the people, we were talking to them as if we were talking to the ordinary people because they represent their constituents and then they understand why this has to be done.
â€œWe will be realistic. We will introduce the reform of the industry over a period of time to so that we minimise the impact,â€ the Minister added.
Lukman who explained that the target for production statistics is to have 40 billion barrels per day as reserve, said that the nation presently meets 37 billion barrels per day, adding, â€œOur target for next year in terms of production is four million barrels per dayâ€.
According to the Minister, the money to be saved when deregulation becomes a reality would â€œnow go into the budget of the federal government, state governments and be used directly to finance those projects which are considered to be essential for the benefit of the people.
â€œIf this money is not available, it means that the project to be executed will be attenuated to the extent that we donâ€™t have the money. Now, you have extra money in your pocket and you can do something.
â€œThe removal of petroleum subsidy is ultimately inevitable because government is spending so much on subsidy that other government activities have become compromised to the extent that the resources which should have been put into these projects like health, education, road construction the money is being used on subsidy.
â€œThis situation is untenable, it is unacceptable and we have to deregulate. We have virtually reached that point and the ministry has now finalised the approach which will be in the next few months we will get ready to effect this for the benefit of our economy and more importantly too the benefit of our teeming populationâ€.
Earlier in his remarks, the National Chairman of PDP, Prince Vincent Ogbulafor, explained to the minister that the briefing was designed to ensure that the party was properly informed about the activities of the ministers as a way of reaching out to the electorate on the partyâ€™s activities.
MEND threatens to attack repaired facilities
Spokesman of the militant group, Jomo Gbomo, who issued the fresh warning in an online statement said the six hostages kidnapped from a chemical tanker â€˜Sichem Peaceâ€™ would be released in the next 24 hours.
His words, â€œWe wish to make it clear however that the pipelines and facilities that were destroyed during Hurricane Piper Alpha and Hurricane Moses will be revisited if they are repaired during this time.
â€œWithin the next 24 Hours, the six crew members of the chemical tanker, the Sichem Peace will be released.
â€œThis is a dividend of the current ceasefire and we hope that the Federal Government will begin to reciprocate our gesture by withdrawing the JTF from the Gbaramatu community and allowing the displaced people return homeâ€, he added.