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Deregulation, not now – Oil Minister

Ajumogobia
Ajumogobia

By Yemie Adeoye & Daniel Alfred
LAGOS—THE Minister of State for Petroleum Resources, Mr. Odein Ajumogobia, said the Federal Government’s planned deregulation of the downstream sector of the petroleum industry will not be immediate.

According to him, although plans in that regard had been concluded, no date has been fixed for its take-off.
He said this when he visited the offices of Vanguard Media Limited in Lagos, yesterday.

According to him: “As one of the most vocal advocates of deregulation, what will happen in a deregulated economy is the decentralisation by natural forces. People will bring their fuel and because you are a businessman the government is not going to compensate you for bringing in products.

PEF, an interim measure

“The Petroleum Equalisation Fund, PEF, is still part of the industry reform bill, and, I think it comes as an interim measure because our refineries are not working. The argument has been made mainly by the Nigerian National Petroleum Corporation, NNPC, that as long as the Kaduna refinery is not functional, the disparity between the cost of products in the North and where the products are coming from in the South, maybe so much that there may be some incentives for people in a deregulated market to sell in that region.

“I think this is like an insurance policy, and PEF would eventually become redundant in a fully deregulated market and that is the argument in favour of the exercise.”

Minister  	of State for Petroleum Resources, Mr. Odein Ajumogobia
Minister of State for Petroleum Resources, Mr. Odein Ajumogobia

Insists on deregulation

Reacting to questions from the editors, the minister noted that the complete deregulation of the downstream sector of the petroleum industry appeared to be the only panacea to incessant scarcity of petroleum products in the country.

“We don’t have to say things without verification. Every litre of petrol that NNPC sells is subsidised. As at today, you cannot import petrol for N65, it is impossible.

“The only way petrol can sell less than N65, is, if we sell the crude stock to the refinery at less than the international market price, meaning we will still be subsidising the cost of crude.

For NNPC, every litre of fuel is being subsidised. All the pipelines that are being vandalised, NNPC do not have to bear that cost. Again, these are some of the problems that have been giving the government setbacks,” he said

On when queues will disappear, he said; “I believe that the most obvious thing is the shortage of supply and the other is an inefficient distribution system. Today, I can say without equivocation, that in terms of our daily supply, there is sufficiency.

The problem is distribution, and Lagos is particularly important because Lagos alone accounts for about 58 per cent of the nation’s consumption.

“Lagos is also the major trunk through which products are distributed to Mosimi, Ibadan and other parts of the country. So, if Lagos is truncated for six hours, the rest of the country will feel it. That is why Lagos is very critical,” he added.

IPMAN debunks NNPC’s claim

Meantime, the Independent Petroleum Marketers Association of Nigeria, IPMAN, has faulted the take over of some filling stations by NNPC, saying the fuel crisis in the country would continue unless appropriate steps were taken to ensure availability of products just as the Action Congress, AC, accused the Federal Government of insensitivity to Nigerians by allowing the fuel scarcity to continue without any action.

NNPC had announced, last week, the acquisition of 178 petroleum products retail outlets to augment the 38 NNPC Mega Stations and 12 Floating Filling Stations as part of its long-term objectives to ease the challenge of artificial fuel scarcity.

IPMAN’s President, Alhaji Aminu Abdulkadir, in an interview in Abuja, said the role of independent marketers in the distribution chain has to be taken seriously in the process of formulating policies for the industry if such policies must succeed.

Said he: “I think it (the taking over of some filling stations) is an action in futility. For 40 years, major marketers have said they will acquire our filling stations, how many have they acquired over that period of time? They acquired only 1,600 in 40 years. IPMAN members have built over 18,000 retail outlets over this same period.”

According to him, “We have enough retail outlets to distribute the products, but we can’t find the product anywhere. NNPC’s plans to take over the filling stations is not an issue as major marketers have tried that collectively in the past and it has not worked. The fundamental issue is the unavailability of the product. Once the product is available, anybody can run the filling stations.

Scarcity pushes up cost of living–AC

According to AC, the scarcity of fuel has led to a huge rise in the cost of living, and many avoidable accidents, on the roads and in homes, with fatal consequences as motorists load extra fuel in their vehicles and store them in their residences

In a statement in Ilorin, yesterday, by its National Publicity Secretary, Alhaji Lai Mohammed, the party said “those who have been boasting that the government is functioning at full blast – even in the absence of President Umaru Yar’Adua -can now see the hollowness of their self-serving claim, they can see that the country is gradually grinding to a halt and Nigerians becoming increasingly overburdened, no thanks to a clueless, insensitive and uncaring government”!

“This recurring instances of fuel scarcity, which usually worsens by the end of the year, must stop forthwith, and if the government has run out of ideas on how to end it, it should simply step down,’’ the party said, adding: “This year alone, we have counted at least six instances of fuel scarcity.’’

It wondered whether the scarcity, which has always made Africa’s largest oil-producing nation a laughing stock in the comity of nations, was indeed, orchestrated by the government (as being insinuated in certain quarters) just to force the bitter pill of deregulation down the throats of Nigerians.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.