Business News and Articles
StockNewsLine.com

Deregulation: We're only waiting for right time [to lower the boom on the masses] -Lukman

Deregulation: We're only waiting for right time - Lukman

By Hector Igbikiowubo& Oscarline Onwuemenyi

Tuesday, January 19, 2010

ABUJA -THE Minister of Petroleum Resources, Dr. Rilwanu Lukman, yesterday, announced that government has concluded negotiations with stakeholders in the oil and gas sector over the proposed deregulation of the downstream sector, and was only waiting for the "right time" to launch out.

While the wait continues, Vanguard checks revealed that imported petrol, also known as premium motor spirit, PMS, is now N112.68k per litre, an indication that fuel consumers may have to pay an extra N47.68k or more whenever government goes ahead to deregulate. The minister, however, added that the inability to reach a conclusion on the take-off of the reforms has slowed down the development of the oil and gas sector in the country.

Lukman made the disclosure at the opening ceremony of a workshop by the Nigeria/UK Energy Bilateral Capacity Building Support for the Oil and Gas sector Reforms, in Abuja.

Last year, the government served notice it cannot continue to incur the huge expenditure on subsidy, noting it had taken a conscious decision to implement full deregulation of the downstream sub-sector. However, government backed down on a self imposed date for implementation of full blown deregulation of the sub-sector.

Capacity building for oil and gas reforms

Lukman said: "We have virtually come into agreement with all the major stakeholders that we have to go ahead with deregulation.

The question is not whether we will do it, it is about timing. It is about when. The economics is clear, it is just a matter of time. We are considering what will be the best optimum time to do it so that we can put in place to achieve maximum results with minimum headaches. Most of the stakeholders are aware of the reason we have to deregulate. We have to choose the right time."

He added that the fact that the refineries and pipelines are not working "is a different issue which we are handling separately. Nothing is holding it; we have to choose the right time. The marketers are onboard. They agree with the principle of deregulation. It is in their interest. They will benefit as much as our citizens are going to benefit."

Meanwhile, the nation is to pick lessons from the United Kingdom's energy sector reforms as part of an initiative to prepare the Nigerian oil and gas sector for the proposed industry reforms bill before the National Assembly. The minister described the workshop as a symbol of Nigeria-UK constructive relationship, adding, "We are hoping that we will be able to learn from the experience of the United Kingdom which has gone through this process a long time ago.

We cannot do exactly what they did, but we can adapt and adopt the principles they have used to suit our own situations, train our people especially in the regulatory agencies so that when the bill is eventually passed, we will be able to promote its implementation very robustly to ensure that the best results are obtained in the industry.

"We are waiting for the bill to be passed. Reform is long term in nature and on a continuous basis. Already we have two regulatory bodies in place. They are already working. What we hope to do through this training is to enable them do their work more efficiently and have a core of trained expertise that can handle these problems. We have a myriad of problems, various control measures we have to out in place for better management of the industry as a whole. All these are areas that require trained people, experienced people."

On his own part, the British High Commissioner, Bob Dewar represented by Mr. Peter West, indicated the UK's commitment to the provision of technical expertise for Nigeria's Oil and Gas Sector noting that the UK attaches great importance to the bilateral relationship with Nigeria.

Imported petrol hits N112.68 per litre

While cost, freight and insurance raises cost of petrol landing Nigeria's ports at N93.57k per litre, other charges amounting to N5.91k per litre places the landing cost at N99.48 per litre. The pricing template of the Petroleum Products Pricing and Regulatory Agency (PPPRA) further disclosed that marketers' margin amounting to N13.20k per litre raises the expected pump price to N112.68 per litre.

However, though marketers have taken the liberty to retail petrol at whatever prices that suits them, government still retails petrol to marketers through the PPMC at N55.90k per litre, while officially the pump price remains N65 per litre.

Regions : Africa

More articles on this topic: