There are indications that the Federal Government is set to deregulate the oil and gas sector.A statement issued by the Ministry of Finance on Sunday in Abuja quoted the Minister of State in the Ministry Mr Remi Babalola as saying that full deregulation of the oil and gas sector had become necessary.
He said the 4.5 billion dollars subsidy on petroleum products was no longer sustainable.â€œOil remains our biggest blessing but the sector also faces enormous challenges. These challenges have discouraged private sector investments in new refineries and contributed to making existing refineries cost centres. Our aim is to maximise the opportunities in the industry, grow the downstream and deregulate the sector completely.â€œFull deregulation of the oil and gas sector appears very imperative.
This will encourage investment in refining and marketing infrastructures,â€â€ the statement quoted Babalola as saying.Â It said Babalola gave a clue on Federal Governmentâ€™â€™s policy in the sector while presenting a paper at the annual management lecture of the Department of Management and Accounting, Obafemi Awolowo University, Ile-Ife. According to the statement, Babalola said, the legal and regulatory framework for the comprehensive reform of the oil and gas sector of the economy was currently being considered by the National Assembly.â€œIf we must liberalise the failing institutions, we must encourage privatisation and public private partnerships as the appropriate form of getting the best out of our resources.
We believe strongly that Public Private Partnership (PPP) will deliver real value for money if properly managed under the Infrastructure Concessioning Regulatory Commission (ICRC)â€â€, he said.Babalola reiterated the need to move away from government-owned and government-run institutions to avoid failed institutions.
Major reforms have been implemented in the areas of taxation, public service, pension, insurance, capital market, banking, public expenditure, the judiciary and telecommunications.All of these remain critical to national development. Our aim has been to ensure that reforms form the bedrock for the Nigerian systemâ€, Babalola said.The minister disclosed that Foreign Direct Investment (FDI) recently rose to more than 14 billion dollars from 2.1 billion dollars in 2004. The ministerâ€™s paper, the statement said, was presented by his Special Assistant, Mr Bode Agunbiade.