By Bimbola Oyesola
STAKEHOLDERS in the downstream sector have blamed the persistent fuel crisis on the centralisation of petroleum products supply driven by the Nigeria National Petroleum Company (NNPC).
The stakeholders comprising major marketers, depot owners and independent marketers identified as a major cause for concern for investors, the inherent entrenchment of the NNPC to the detriment of private investors in the sector.
They equally blamed the inability of the Central Bank of Nigeria (CBN), to provide foreign exchange for the payment of matured LCs to their offshore fuel suppliers estimated at over $1 billion as at 2015 as another major problem for the scarcity.
At the stakeholders’ forum organised by the Lagos Chamber of Commerce and Industry (LCCI) and the Petroleum Downstream Group to review key issues and proffer solutions, the stakeholders condemned the lack of clarity on the deregulation and liberalisation of the sector, which they said had put many investments in the sector at risk, as part of the major problems.
The LCCI Director General, Muda Yusuf, who read the communiqué issued at the end of the meeting lamented that the downstream petroleum sector currently suffers from overregulation, which has profound negative consequences for growth and job creation in the sector.
As a way forward, he said the stakeholders at the meeting called on the government to urgently deregulate and liberalise the downstream petroleum sector for unfettered private sector participation and investment, subject to an appropriate regulatory framework.
He said, “there should be a level playing field for all operators, including the NNPC. This model will put an end to the perennial problem of fuel scarcity in the country and the hardships suffered by citizens due to fuel scarcity. This would also attract more investment, generate more jobs and reduce the pressure on foreign reserves.
“Stakeholders stressed the need for the role of the NNPC to be clearly defined. It should not be an operator and still have regulatory influence in the sector. An arrangement that would allow for a level playing field should be adopted for all players including the NNPC.”
Yusuf said the roles of the DPR and the PPPRA also need to be better defined as there are often instances of overlapping and duplication of responsibilities.
As far as the stakeholders are concerned, the nation’s refineries should be made to run as commercial business entities.
Therefore he noted that the stakeholders recommended that the NLNG model should be adopted for the refineries to improve efficiency and reduce the burden of the refineries on the nation’s treasury.