6 November 2011

Nigeria: Moman - PIB, Not Condition for Deregulation

Major Oil Marketers Association of Nigeria has warned against any move to make the passage of the Petroleum Industry Bill (PIB) a condition for deregulating the downstream oil and gas sector of the country.

MOMAN said such plan which is been proposed by organised labour movement in Nigeria and perhaps some members of the Nigerian parliament was not an appropriate means of sanitising the downstream sector considering the recurrent delay in passage of the PIB.

Executive Secretary of MOMAN, Mr. Obafemi Olawore, told journalists at the weekend in Abuja during a briefing on the Oil Trading and Logistics Expo (OTL) Africa downstream 2012, that such pre-condition was a wrong suggestion that would not serve the best interest of Nigerians.

MOMAN, with established members like Mobil, Conoil, Total, Forte Oil, MRS Oil and Oando Nigeria Plc, is a key stakeholder in the marketing and distribution of petroleum products in the country.

"They started talking about the PIB a long time ago, yet the current Assembly said that they will not pass a bill that was not concluded by the past Assembly which means that they will start all over again with the PIB and we will wait for another two to three years again and go through the same problems; is that what we want? If that's what Nigerians want, fine all of us will go through it collectively," Olawore said.

He explained further that as far as MOMAN is concerned, the country is wasting time because the time to deregulate this sector was yesterday and not even today. He admitted that government had made the mistake of regulating in the 70's but should have deregulated long time ago.

"If the National Assembly will not pass the PIB and there is a legal means of deregulating, let's go ahead and do it, very soon the country will not be able to pay basic salary, which is the path we are heading to now," he stated.

In his explanation of the prospects in a deregulated Nigerian downstream oil and gas sector, Olawore said, "As far as we are concerned, deregulate and see whether people will build refineries or not, if people think that when you build refineries the price of petroleum product will go down then they are wrong because the most important input is the crude itself which price is determined by international market forces.

"At $100 per barrel for example, it amounts to about N99 per litre before you refine then add the refining and distribution costs as well as the small margin for the refiner, we shouldn't deceive ourselves, deregulation is the stark reality and we will continue to say it whether it is palatable or not, the truth is that we brought ourselves into this when we regulated in 1973-75, now to go back is a problem but we must deregulate to attract investors into the sector,"he said.

Apparently irked by calls for continuous subsidy of petroleum products as part of the social rights of the populace that must not be tampered with, Olawore said, "Look at all of us, nobody is making any attempt to go to the farm, we are all after living in big cities, and do oil trading but nobody wants to look at agriculture, why don't we support government to put this subsidy on agriculture, research and development and get people to go back to produce food because as long as we are rushing into the cities and continue to neglect basic things of life, we will continue to be in this mess if we think that government has the means of satisfying all of us."

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