By Yemie Adeoye
IF full deregulation of the downstream sec tor does not commence, the intermittent scarcity of petroleum product will remain with usâ€. This is the position of Major Oil Marketers Association of Nigeria, the body responsible for 57 per cent of petroleum products imported into the country.
Speaking in an exclusive chat with Vanguard in Lagos , the Chairman of the group Mr. Jubril Adewale Tinubu,Â who is the Managing Director of Oando PLC stated further that no refinery would be built in the country until the federal government fully deregulates the downstream sector of the petroleum industry.
â€œIntermittent fuel queues in the country will be a permanentÂ feature until the full deregulation of the downstream sector is achieved.â€ Mr Tinubu who noted that it is a sad thing that the country is experiencing scarcity when it should be benefitting form its enormity in her domain observed that with the way things are presently no serious investor would like to put money in the sector because of deregulation.
â€œThe advantages of deregulation are obvious in the sense that youâ€™ll have product availability look at all the queues out there now.Â Thereâ€™s no shortage of newspapers this morning, thereâ€™s no shortage of radio stations, the tv stations came on, you name the product and its available this morning, but what wasnâ€™t available? fuel and why? Because every other thing covers the cost, when you spend, when you buy it you are paying for the cost that also covers the cost of production.
So first thing is the fuel availability, and second is the creation of an enabling environment for investments in the country.â€
The Oando boss also noted that it is a sad development for a country like Nigeria which produces 2 million barrels of crude daily with an export refinery for refined products.
â€œWe produce 2 million barrels without one export refinery. There is no incentive for anybody to refine, if youâ€™re not sure where your money is coming from and weâ€™ve seen what has happened to NNPC refineries as well, as result of consistent subsidy and thatâ€™s just the truth of the matter.
You can not receive 60 percent of the value of something and expect the equipment to be functional because you will never have enough capital to reinvest in the equipment and thatâ€™s why the refineries havenâ€™t worked. Pure and simple.Â We should be a refined petroleum products exporting nation.Â Fuel supply should be available, jobs should have been created, it should be a big part of our economy in the petroleum sector but its not, only the crude oil produced inside is big, the fuels side of the business which could have been a substantial part of our economy is non existent.
There is no disadvantage in deregulation because the price hike the people worry about is also the cost of availability which they now suffer from.Â So by the time you add all the hours that theyâ€™ve spent in the last three months or the last couple of years and you add this to the additional price per liter you will expect from petrol products, I think the economy has already paid that five times over anyway, and continues to do, or you want to count the amount of smuggling that goes out of the country, a lot of money that we loose on a daily basis because our neighbours are selling at the market price, 30 or 40 percent more than what we are selling.