Emmanuel Kachikwu, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC) wants Fuel subsidy removed and a speedy deregulation of Nigeria’s Oil and gas industry
Mr. Kachikwu reportedly made the call at the 2015 National Association of Energy Correspondents conference, held in Lagos.
The NNPC boss, represented by Bolanle Ashafa, Acting Managing Director of Nigeria Engineering and Technical Company (NETCO), said deregulation would encourage domestic private sector participation and inflow of foreign investments.
According to him, deregulation will also provide a fair deal for Nigerians from the abundant petroleum resources, through fair product prices for consumers, full cost recovery, and reasonable margins for operators.
“Implementation of the policy will entrench efficiency in product usage, product availability and effective competition among investors, hence ending products shortage.
“However, critical enablers such as security of supply and distribution infrastructure must be assured to guarantee the availability of the petroleum products at affordable prices,” he said.
Mr. Kachikwu said the corporation was fully committed to reforming existing refineries, to boost domestic petroleum products supply.
He said that the refineries had been re-streamed, but were yet to attain optimal capacity in production.
“Removal of price control mechanisms is deemed imperative to ensure full growth of the sub-sector, by allowing private stakeholders to complement the effort of government in developing the industry,” he said.
He reassured Nigerians that NNPC would continue to maintain stability in the supply and distribution of petroleum products nationwide.
He said that the Nigerian oil and gas industry would be transformed for greater efficiency and sustainable growth, through market reforms, diversification of the revenue base and monetisation of the natural gas resources.
“We will focus on the need to address infrastructure constraints, to ensure sustainability of gas and petroleum products supply and distribution nationwide.
“We will be tackling infrastructure gaps and promoting inclusive growth, as well as capacity building,” he said.
Also speaking, Deji Haastrup, the General Manager, Policy, Government and Public Affairs, Chevron Nigeria Ltd., said that the cost of executing projects and services in the industry, was high in spite the dwindling price of crude oil.
Haastrup also identified oil theft and illegal refineries of crude oil as other challenges facing the industry in Nigeria.
He commended the NAEC for organising the conference for stakeholders in oil and gas sector to deliberate on crisis in the industry.
Nigeria may not be the only country that is deciding to deregulate the oil and gas industry, removing fuel subsidy is becoming the norm especially due to the attendant cost savings amidst the slump in crude oil price in the international market partially caused by OPEC and the shale industry of North America, the United Arab Emirate recently followed that step when they removed fuel subsidy, their reasoning is in the same line of thought as the GMD of NNPC. we await the speedy removal of subsidies and eventual deregulation of the downstream sector of the Nigeria Oil and gas for greater domestic and international participation and resultant development of Nigeria.