Some operators in the downstream sector of Nigeria’s oil and gas industry have identified deregulation of the sector as critical to the success and viability of the country’s refinery programme as well as the overall long-term success of the downstream sector as a whole.
The Chairman, Integrated Oil and Gas Limited, Capt. Emmanuel Iheanacho, stated that the reason many planned refineries have not come on stream many years after their initiation was because of issues bordering on bad business modelling.
Iheanacho advocated for an ideal market situation for would-be refiners in the country, stating that deregulation is needed to make their business of oil refinery profitable and sustainable.
He called on the government to consider liberalizing the downstream petroleum industry and allowing free market principles to govern the pricing regime applicable to the same, proclaiming that the current situation remained a huge deterrent to operators that are looking to invest in the refining of crude.
In the same vein, the Chief Executive Officer of OVH Energy Marketing, Huub Stokman, said that Nigeria was one of the few members of the Organisation of Petroleum Exporting Countries (OPEC) without efficient refineries. He added: “There is no viable refining if we do not talk about deregulation and removing fuel subsidy”.
These recent calls for the deregulation of the downstream sector, echo the remarks made a few weeks ago by the Chairman of the Major Oil Marketers Association of Nigeria (MOMAN) in relation to the same. It would appear that there is therefore a growing push in the downstream sector for deregulation of the petroleum pricing regime.
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