Worried about the state of the nation’s economy, the Major Oil Marketers Association of Nigeria (MOMAN) has declared that adopting a cost optimization initiative, building an environment that promotes competition and creates a sustainable petroleum sector will set Nigeria on becoming a refining hub in West and Central Africa.
They also called on all Key players in the nation’s fuel market to drive initiatives that can be taken to ease the impact of the subsidy removal on the most vulnerable in the society.
Mr Tunji Oyebanji, Chairman of MOMAN stated this while speaking with Energy Editors in press briefing titled’ AFTER DEREGULATION, WHAT NEXT?”, stressing that efficient deregulation of the domestic fuel market remains the most credible way of optimizing the value of the nation’s petroleum resources within the energy transition window.
According to him ‘Nigeria can become the refining hub of West and Central Africa and eventually the whole of Africa if we stick to this path of investing in new refineries, adopting a cost optimization initiative, building an environment that promotes competition and creates a sustainable petroleum sector.
“These actions would lead to increased employment, reduced poverty and reduced social inequity. We must take advantage of the opportunities brought by the African Continental Free Trade Area agreement (AfCFTA) and fully benefit from our barrels of crude, getting the maximum value it can bring Nigeria.’’ He stated
He said there is need for the government to pass a Petroleum Industry Act that would guarantee cost efficiency across the full spectrum of the petroleum industry as credible means of spreading resource value to all stakeholders in the economy.
Oyebanji, who alluded to the industry cost reduction programme of the petroleum ministry, argued strongly that cost efficiency must not be limited to industry players but fully spread across the nation’s regulatory, political and administrative structures in order to optimize value.
He stressed that efficient industry and political governance structures are required to guarantee measures that address the dreaded price escalation associated with liberalization of the downstream petroleum sector.
Mr Tunji Oyebanji, whose group controls key investments in the downstream petroleum industry, called for a full stakeholder engagement forum to evolve a workable liberalization action plan that does not spur inflation.
He added that stakeholders must “debate and share pragmatic and realistic initiatives to mitigate the impact of a pump price increase which could follow a fully deregulated downstream.”
“With a fully deregulated downstream industry, the natural fear and anticipation of Nigerians is the increase in the price of transportation, food items and the attendant economic hardships. Solutions to these challenges can only emanate from a collective resolve by all stakeholders to face up to these challenges together,” he explained.
According to him the benefit of a liberalized downstream is the most visible means of growing the economy in the medium to long term.
‘’We believe that as a country, we have and should move beyond the debate on the arguments for the removal of petrol price subsidies. The discussion we should be having today is how best to maximise the benefits of the removal of price controls and subsidies while minimising the adverse effects of this action on our citizens.
Speaking on domestic refining capacity, he noted that despite being a country blessed with petroleum resources, we still import refined products. Even though refining would not start in Nigeria immediately, as a result of a whole catalogue of diverse and varied reasons which will not be listed here today, it is necessary that we as a Country have some clarity as to when optimal internal refining capacity will return to Nigeria.
‘’We need to collectively and as a nation, track the progress of work at all the new refineries under construction across the Country to ensure they are delivered timely, efficiently and sustainably. If need be, private investment should be brought in to facilitate the rehabilitation and upgrade of the NNPC refineries for the efficient growth of Nigeria’s internal refining capacity and to ensure energy sufficiency for the Country.
