Olusola Bello
The Corona Virus Pandemic has exposed the challenges of the Nigerian Economy as well as created an opportune time to take decisions for the long term benefit of the economy and Nigerian citizenry;
The Nigerian downstream oil and gas industry under the present price control regime, is characterized as follows: Over regulated and inefficiently regulated, encourages fraud and corruption, promotes inefficiency and unsafe business practices, effectively uses Nigerian tax payer funds to subsidize petroleum consumption in West Africa, discourages investment in the downstream sector by responsible investors who are expectant of proper returns on investment;
Proposed action that should be taken be immediately according to industry operators, removal of price control and introduction of full de-regulation of the downstream petroleum sector, programme for equal access to Foreign Exchange for oil marketers to import petroleum products, pending full development of local refining capacity, limiting the importation of petroleum products to Marketers with sizable investments in Nigeria, the emergence of a single robust regulator for the sector to promote safety and sustainable business practice, encouragement of the FCCPC to ensure proper competition in the sector.
The benefits of taking the above proposed action include; Huge savings of Trillions of Naira to the Nigerian economy, which is available for utilization in critical sectors of the economy, avenue for government to create a new income stream of fuel taxes (as practiced in most countries of the world) to grow the country’s revenue; encouragement of private sector investment in the downstream sector, which will result in inflow of capital, employment opportunities, improvement in safety and efficiency of operation in the industry, perpetual availability of petroleum products in all areas of the country at competitive prices;