Female Group Seeks Full Deregulation of Oil Sector

0

Emmanuel Addeh in Abuja

Female professionals in the energy sector have called on the federal government to carry out full deregulation of the downstream petroleum sector and free the industry for investment.

Coming under the umbrella of the Women in Energy Network (WIEN), in a position paper titled: ‘Exiting Petroleum subsidy: Ensuring Self-sufficiency in the Domestic Refining of Petroleum Products’, presented to the senate, they called for far-reaching reforms in the oil and gas industry.

The women body led by its president, Mrs. Funmi Ogbue, noted that though the recent attempts to deregulate the petrol prices were laudable, it was also an opportunity to urgently and holistically address the fundamental problems hindering the overall growth of the oil and gas sector.

“WIEN joins other industry stakeholders to advocate for an open, transparent, and free market environment with clear rules and regulations guiding competition, consumer protection, health, safety, quality, and the protection of the environment,” the organisation said.

It urged the government to ensure that all market players should be subject to the same rules and regulations, backed by appropriate legislation, insisting that a situation where government imposes prices cannot guarantee efficiency and sustainability of the industry.

“The federal government should establish a clear guide or timeline indicating its plans for the complete deregulation of the industry. Price modulation could be subject to political interference and relies heavily on the capacity and political strength of the agency or agencies involved for success” the group opined.

The body further called for a review of existing laws in the downstream sector in order to properly incorporate and consolidate the recent government pronouncements, and ensure their sustainability beyond the current administration.
It noted that the continuous operation of the Petroleum Equalisation Fund (PEF) was not compatible with a deregulated market, positing that it represents a variety of subsidy and leaves room for corruption and abuse .

“Therefore, we recommend that PEF should be abolished, as they play no role in the diesel market presently” it said.
WIEN also called for equal access to foreign exchange at competitive rates to all market players, saying that this can be achieved through a transparent and auditable process of open bidding.

On the need for improved local refining it said: “Despite the country’s significant oil wealth and production capacity, Nigeria imports around 90 per cent of the refined Premium Motor Spirit (PMS) that is sold to consumers at petrol stations around the country, as it does not have refineries capable of meeting anything but a minute portion of Nigeria’s domestic demand.

“It is extremely rare for major oil producers to import petrol in such quantities. Nigeria is one of the only members of OPEC (besides the Republic of Congo and Equatorial Guinea) that imports any such products at all.

“Nigeria’s four refineries have been poorly maintained for decades and operate at a fraction of their actual capacity. The refineries have originally installed capacity to refine 445,000 barrels per day but are currently running at about 2 per cent of that.

“Three of the four refineries are currently shut down and the fourth is running at 8.7 per cent of its capacity. It is believed that it would be more efficient to build new refineries than to fix the existing ones,” the women opined.