By Chuks Okocha
Former Vice President and presidential candidate of the Peoples Democratic Party (PDP) in the 2019 election, Alhaji Atiku Abubakar, has again called on the federal government to liberalise the country’s downstream oil sector as the current situation whereby the Nigerian National Petroleum Corporation (NNPC) uses scarce foreign exchange to import fuel at subsidised rates is not sustainable.
Atiku in a statement issued by his media office in Abuja at the weekend said the focus of the federal government should be to aggressively drive the enhancement of the local capacity to process larger quantities of our crude oil for domestic consumption and not be fixated over price fixing.
He emphasised that closely related to this is the need to build the enabling infrastructure to add value to the economy via the development of petrochemical facilities, explaining that these would allow the country to impact upon so many sectors, including agriculture, pharmaceuticals, textiles, construction as well as food processing.
According to him, UNIDO estimates that up to one million new jobs can be created in Nigeria within 10 years through investments in petrochemicals and petrochemicals-based activities.
On the propriety of fixing the pump price of petrol, Atiku noted that the price of petrol is not determined by only the price of crude oil.
According to the former vice president, “The price of crude oil and fuel can fall even further or go up without notice. Nigeria, as it stands today, does not even have the money to continue to be involved in backstopping fuel price at any level. And the way to go is to liberalise the downstream sub-sector and not fix prices as long as the marketers can import on their own and sell.”
Atiku said the way out of this ‘embarrassing situation’ is to prioritise investments to ramp up the domestic refining capacity and ensure that Nigeria starts processing domestically at least 50 percent of its current crude oil output of two million barrels per day.
This, he said, could be achieved within a very short time if the government encourages private sector participation under a liberalised downstream.
His position, the statement said, followed report of another planned adjustment in the pump price of petrol as the planned reduction is coming against the backdrop of an earlier one from N145 to N125 per litre in March.
He lamented that Nigeria is by far the most inefficient OPEC member country in terms of both the percentage of installed reﬁning capacity that works and the percentage of crude oil reﬁned, trailing behind countries like Iraq and Libya that have recently been at war or are experiencing civil strife.
The former vice president regretted that Nigeria is currently the largest importer of petrol in the world, noting that not only is this counterproductive for the economy, “it equally has signiﬁcant balance-of-trade implications (especially in this season of COVID-19 instigated economic meltdown) due to reﬁned oil products being by far the single largest import item on which Nigeria spends its diminishing hard-earned foreign currency.
“And given the extensive capital outlay that this may command, our goal should be to privatise existing refineries and create opportunity for new ones in our effort to diversify the economy, generate additional revenues and create jobs.