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Strategic Energy Limited boss backs calls for deregulation

The Managing Director of Strategic Energy Limited (SLE), Mr. Dayo Adeshina has said that deregulation of the downstream sector of the Petroleum industry would go a long way in the nation’s fight against global warming/climate change.

In an exclusive chat with Vanguard in Lagos, Adeshina frowned at a situation where government spends billions of naira subsidizing kerosene as a cooking fuel “when that same fuel they are subsidizing at a heavy cost can be making them more money in dollars as aviation fuel.”

Mr. Adeshina who described kerosene as a poisonous fuel, said “kerosene really should be used as aviation fuel. All you have to do is blend. One is dual purpose but it’s the same basic kerosene. I mean it makes no sense whatsoever to be subsidising something that is killing people when you can divert the same product, blend it and use it as aviation fuel and make more money in dollars.”

Buttressing his argument, the SLE boss said once kerosene is deregulated, the price of the product would automatically go up and this would in turn dissuade most consumers from using it and instead turn to gas which has already been deregulated and much cleaner  .

Speaking on why liquified petroleum gas (LPG) or cooking gas is still out of the reach of many people, Adeshina blamed it on government policy, saying: “It’s cheaper to import gas than to buy from NLNG . The Obasanjo government cut down the tariff  to 5%. Today, that tariff has gone up to 20%, cooking stove has gone up to 20% – 35%. This is outside of VAT. Storage tanks attract 20% so how is it going to be cheaper?” he asked.

He said though Nigeria has two plants where cylinders are produced in Abeokuta and Ibadan, he regretted that the incessant power outage and moribund equipment have hindered production. “We have to import flat steel. Everything has a multiplier effect, everything is interrelated. Price of cooking gas can only come down if all these factors together are taken care of,” he stated.

Asked if deregulation of kerosene and high cost of gas would not make people to go back to the use of firewood, he said: “But is there firewood in the north? Fifteen states now suffer from desertification. Even if you take the economic aspect away, what about the environmental aspect? It is very important that government pays serious attention to it.

Our weather pattern has changed. Rainfall is a lot more significant; not just here but the world over. Now, I hear government talking about seminars on environment, setting up committees but I’ve never heard they shut down any industry for pollution. Nigeria is the largest importer of generators so we are the ones actually polluting the environment. Fortunately, generators can use LPG which is proven to be a lot more cleaner than diesel, petrol or kerosene. It is actually one of the reasons why the World LP Gas Association was present in Copenhagen. ”

Answering question on why the electricity company, Power Holding Company of Nigeria (PHCN) has been complaining of lack of gas, the nation produces and exports gas, Adeshina said: “Those are two different things. The way our own gas plants here are designed, they are thermal plants so not the LNG type that you have to refrigerate, you have re-gasification terminals and all that.

But be that as it may, LPG could also be a solution because there are LPG-fired turbines,” he said adding that “the problem with power in the country is not generation per se. It’s more of transmission and distribution because if you generate power here in Lagos today and you put it in the transmission line, national control is in Osogbo and they decide where the power goes.

The investment you need in power is actually in transmission not generation. The transmission lines are old.”
He appealed to government at all levels to make the environment more conducive for people to do business by putting all the necessary infrastructure in place.


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