Uche Usim, Abuja
The Petroleum Products Pricing and Regulatory Agency (PPPRA) on Sunday assured Nigerians that the deregulation of the downstream sector of the petroleum industry is the way to go as it would stimulate economic growth by unlocking trillions of Naira hitherto spent annually on subsidies into other critical sectors of the economy.
The Executive Secretary of the Agency, Mr Abdulkadir Saidu, said, though the recent increase in pump price of petrol may have unsettled Nigerians because of the fragile state of the economy, deregulation is in the best interest of the country because competition has a way of forcing down prices and ensuring that companies place a tight rein on production cost such that wastes that could be passed on to consumers in form of high prices are eliminated.
He said: “The trillions of naira that would have been spent subsidising PMS could be injected into other key sectors such as agriculture, education, health, power and infrastructure. There would also be focus on the provision of social safety nets for the poor who bear the brunt of the COVID19 pandemic.
“We assure the public that the Agency, in keeping with its regulatory role, will continue to closely monitor activities in the market and ensure transparency in line with international best practices. Our vision to attain a strong, vibrant downstream sub-sector, where refining, supply, and distribution of petroleum products are self-financing and sustaining can only be effectively actualised in a deregulated environment”.
He added that since the commencement of the new price regime which heralded full deregulation of the sector, a considerable increase in the level of oil marketing companies’ (OMCs’) participation in petrol importation has been recorded.
“In recent months, OMCs withdrew from product importation, but since the Federal Government’s pronouncement on March 19 2020, over 536,000 metric tons of PMS have been directly imported by the OMCs.
“Additional investment in local refining is gaining traction and is expected to engender more competitive pricing. The Dangote Refinery with a refining capacity of 650,000 barrels per day will certainly impact positively on the price of PMS in the market when it commences operations in 2022. We expect to see more investments in modular and conventional domestic refining going forward.