Abuja — Federal Government said yesterday that it has already started working on palliatives aimed at assuaging the suffering of Nigerians, as it plans to pursue deregulation of the downstream end of the oil sector, any time next year.

The government said it has completed 50 percent of the rehabilitation work on 67 federal roads across the country and railways will start working by the end of 2010.

Deputy Chairman and Minister of National Planning Commission (NPC), Dr. Shamsuddeen Usman, who disclosed these at the end of the 15th Nigeria Economic Summit (NES #15) yesterday in Abuja, indicated that the government, realising the drastic negative effect, the new policy will likely have on the people had decided to increase its efforts at improving their living standards.

From all indications, deregulation of the downstream end of the oil sector will translate to increase in the pump prices of fuel.

"The palliatives are already being implemented. I said it earlier, that 67 federal roads are being rehabilitated and more than 50 per cent of the work is already ongoing. It has never happened before to have as many federal roads all being rehabilitated at the same time.

"The minimum amount of time it takes to get this job done is about 12 to 18 months, so in another 12 to 18 months you will see a significant improvement in the road infrastructure and the railways will start by the end of 2010.

"You will have the inland waters so that you can travel from Warri to Barro, may be in two to three years. Especially, it is not so much human traffic as freight traffic, which is what is destroying the roads currently.

"If you get the heavy freights off the roads then the roads will last longer. It's more economical and more efficient because nobody will use the roads if we have the railways. It is safer and cheaper, " he said.

From all indications, deregulation of the downstream end of the oil sector will translate to increase in the pump prices of fuel.

But Usman allayed the fears about rise in the prices of petroleum products, especially fuel, assuring that competition would drive down the prices in the long run.

He however emphasised that prices will definitely come down when deregulation of oil sector is implemented, saying "in telecoms, prices are coming down directly or indirectly. That is what will happen to the power sector and the petroleum sector."

According to him, "really the government is already providing the palliatives. People are afraid that prices will rise during the deregulation.

"They may rise in the initial period, but competition, you create a situation where new refineries are built, especially by the private sector and like the telecom sector, the prices will come down."

The minister lamented that the privileged few who have constituted themselves into cartels were benefiting from fuel subsidy on. This, he said, had allowed inefficiencies and had been eating deep into the purse of the government.

For instance, he said within a period of the past two years, the Federal Government had subsidised fuel importation to the tune of N1.6 trillion, an average of about N800 billion per year at the expense of the people.

Said he : "The message is that the average Nigerian is not benefiting from the system as it is now. First of all, you go to many parts of Nigeria and there are only a few places where people get these products at the controlled price.

"Secondly, in the last two years about 1. 6 trillion has been spent on fuel subsidy with an average of about N700 billion. That is money that is higher than the total amount spent on the capital budget in each of those years.

"Which means, this is money that should be going into road development and railways, building of hospitals and schools, rehabilitation of the inland water ways and the ports. And that is what will impact on the quality of life of Nigerians."

Earlier at the closing plenary session, the Rivers Governor Rotimi Amaechi, advised the Federal Government not to be involved in the business of power and petroleum sector but should allow the private sector to operate with a view to engendering competition and efficiency.

He posited that protracted debate on deregulation in the power and petroleum sector had succeeded in only delaying the effective running of the sectors, which will in turn affect inefficiency.

To him, it was better to have an effective system with increased prices, than dwell in inefficiency with the fear of price increases.

Declaring the summit closed, Vice President Goodluck Jonathan, who was represented by Usman, stated the government was willing to integrate some of the ideas that would improve its efforts in developing the economy.

According to him, "The present administration will deepen reforms to improve the livelihood of Nigerians,"

Jonathan said the conclusions of the 15th Nigeria Economic Summit (NES) will presented to the National Economic Council (NEC) for deliberations.

Presenting the summary of the summit, the Vice President, Private Sector of the NESG, Mrs. Wonoula Adetola, said the government would need to work on its institutions, infrastructure, macroeconomic indices and health and the primary education.

Adetola said major institutions in the public and private sector were still too weak to drive the economy, citing spillovers of the weak institutions to diversion of public funds, wastefulness of government spending and the burden of government regulations.

She said public trust of politicians was still low, noting that the judiciary must be given more room to operate independently.

On infrastructure, Adetola said the roads, railways, electricity and telephone systems yearn for improvement and the government and private sector must partner to provide solutions.

Adetola said the government must seek to improve on its score on inflation rate, interest rates, national savings and government debt.

According to her, malaria and HIV still rank as challenges in the health sector and the life expectancy was still low compared to other jurisdictions.

She said the records on infant mortality and primary school education must be improved in order to realize the targets set in the Vision 20:2020 blueprint.

Apart from the four core pillars for growth, Adetola said efficiency enhancers to be considered include higher education and training, market efficiency , technological readiness, business sophistication and innovation.