Total deregulation of oil sector will boost revenue—MOMAN

Executive Secretary of Major Oil Marketers Association of Nigeria (MOMAN) Mr Obafemi Olawore, has stressed the need for federal government to consider total deregulation of downstream oil sector. Olawore in an interview with the News Agency of Nigeria (NAN) in Lagos said it would attract more revenue to government. He spoke against the backdrop of frequent fuel scarcity across the country. He said that total deregulation would be a way of ending the persistent fuel scarcity in Nigeria and this would also attract more investments to the oil sector.

Olawore said that only deregulation would encourage the establishment of private refineries in the country. According to him, when the sector is fully deregulated more investors will come and invest in refineries, transportation and depots that will address the lingering fuel scarcity as well as boost government’s revenues. “Deregulation will also enable the Nigeria Railway Corporation to lift more products from the South to other parts of the country at cheaper rates. The railway system is faster, cheaper and will deliver more volume at a go than road transportation. This will also attract more revenue to the corporation and also expand their infrastructure,’’ he said.

Olawore advised government to embrace total deregulation and allow market forces to operate. “People are afraid that deregulation will increase petroleum pump price, but l have always cited the situation of telecoms network providers as practical example of total deregulation. The MTN and Airtel service providers came with per minute billing, but when Glo introduced per second billing, this cracked their ribs; that is the beauty of deregulation.
“Deregulation does not mean you can do any nonsense because there will be a strong regulator in place just like that of the NCC that will call people to other. We want a regulator that will enforce sanity not only in downstream, but also on environmental issues where nobody build depot anywhere.

“That is what a strong regulator will do to curb instability and insanity,’’ he said.
Olawore said that when investors invested and build more refineries, depots price of petroleum price would drop and this would be to the advantage of the common man.
He said that deregulation would also address frequent shortages of products. When the sector is fully deregulated, marketers will source for foreign exchange at cheapest rate to import in products, not depending on government. The duty of deregulation is that the market will determine whether lazy marketers would stay or quit the system.

“If government refineries are not working well now, under full deregulation, they will be privatised or key into the Liquified Natural Gas (LNG) arrangement,” he said.
Olawore also said that business models would be raised under deregulation, while inefficient marketers would be left behind. He, however, stressed that government had no choice than to fix the refineries to work or privatise them.