Lagos — The Presidency last night said there was no going back on the deregulation of the oil sector as the policy was one of the plans with which the administration plans to disconnect the cabal in the sector that has been holding the nation by the jugulars in the distribution and sale of petroleum products.

The Presidency also said the refusal of the marketers to adjust their meters to N65 per litre following the recent reduction in the price of petrol from N70 per litre by the Federal Government further showed that the cabal in the oil sector had no interest of the country at heart.

Reacting to questions on a telephone chat yesterday on the rationale behind the administration's new policy in the oil sector, Special Adviser to the President on Communications, Mr. Olusegun Adeniyi, told THISDAY that the President was uncomfortable with the way the sector was being run.

"The question people should ask is that even with the astronomical fall in the price of crude oil, why is the price of PMS (petrol) still high in our country?

"The answer is simple: It is because what we have currently is a rent arrangement that benefits a cabal and until you break that cabal by deregulating the market, not only will the price not come down; we will also never be able to have functional refineries. What we have today is a system in which there is no competition because it is a seller's market and that is why a few individuals can easily hold the nation to ransom at any given time.

"That is also what is responsible for the questionable risk-allocating practices which became very evident recently when government wanted to bring down the price of PMS from N70 to N65. We all saw the resistance from the marketers. Yet in the past, whenever government increased the price, they never argued about depleting their stock purchased at low price before effecting such changes immediately," he said.

Asked why President Umaru Musa Yar'Adua was still pushing ahead with the policy in spite of the groundswell of opposition from labour and other stakeholders against it, Adeniyi said: "The position of the President is that in an oil producing country like ours, the idea of subsidy running into several hundreds of billions of Naira at this point is unjustifiable.

"If things were normal, I am not convinced we should even be talking of a price as high as N65 per litre given the current price of crude in the international market. That is why the President is insistent that we must create a conducive atmosphere for investment in refineries and that will not happen until we deregulate the market and discard with the current arrangement of price fixing and the attendant abuses that go with it," he added.

The Presidential spokesman further said Yar'Adua has always maintained that: "I have never seen a more lucrative business like that of Nigerian oil marketers where your business carries no risk yet you are guaranteed jumbo profits because government is there to put in huge sums of money by way of subsidy to be shared.

"But perhaps the greatest tragedy in all these is the disposition of government agencies that are ordinarily supposed to be regulating the activities of these marketers and the most notorious of them is the Petroleum Products Pricing Regulatory Agency (PPPRA)."

Adeniyi said the operations of some of the agencies were being reviewed to ascertain their roles and effectiveness. "I can assure you that except we see drastic changes in coming weeks, heads will roll in some of these places. But whatever happens with regards to deregulation, the Federal Government intends to carry organised Labour and other stakeholders along in all the discussions and crucial decisions because they need to know these things are being done in the interest of the people and not to increase government revenues as some people imagine."

He also said that as the President had assured the NLC leadership last week, there was going to be what he called a standing committee comprising labour and the federal government on issues that relate to the general welfare of the people of Nigeria.

According to Adeniyi, "I am very optimistic that for once, we are going to see greater co-operation between government and labour. Unfortunately, I have seen figures being bandied in a newspaper as to what the price of petrol will be next (this) week but we are not there yet. So nobody should speculate about such things.

"I have just spoken with the Minister of State for Petroleum, Mr. Odein Ajumogobia (SAN), who said the meeting they had with marketers yesterday (Friday) was to officially announce to them the policy direction of government, not to fix any price. In any case, as far as government is concerned the template of arriving at the pump price being touted by PPPRA is suspect. So a market price will only emerge after consultations with all the relevant stakeholders," he assured.

The Presidential aide also said what Yar'Adua was working towards was for Nigeria to enjoy full value for her oil.

"That is why he wants to consolidate current efforts for private investment in building a refinery around Lagos area which accounts for about 55 percent of the consumption of PMS in the country while selling off the current refineries through a competitive, open and transparent process without expending any further government money on them."

He continues: "The President believes all areas of waste should be discarded with and the only way forward with regards to the refineries is to sell them to people who can run them efficiently but the process of selling them should also be very transparent and fair. Aside the issue of national pride which compels us to refine at home, we expend so much foreign exchange on this fuel importation business."

He decried a situation where the data from the Central Bank of Nigeria (CBN) reveals that 29 percent of the total foreign exchange sale in January this year went to fuel importation.

"How do you sustain such a system? The point must be made very clear that what goes for subsidy in Nigeria is simply the price we pay for inefficiency and fraud. For instance, a study conducted by the office of the Finance Minister, Dr. Mansur Muhtar, reveals something very tragic.

"In 2006, the pump price of petrol in Ghana was $.92 per litre and this was only after their government had added 47.5 percent tax. Without the tax, the price per litre fell to $0.48 per litre. The sad thing is that at that same period in our own country, the pump price of petrol was $0.51 per litre yet that was after hundreds of billions of Naira had been added as subsidy. We just cannot continue running such a patently corrupt and inefficient system and that is what the President intends to stop and people must recognise this decision takes a lot of political will," he said.