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LCCI Seeks Petroleum Products’ Deregulation



Petrol Importation
  • LCCI Seeks Petroleum Products’ Deregulation

The Lagos Chamber of Commerce and Industry has said that better backward integration policy, more patronage of made-in Nigeria goods and the general prosperity of businesses and the Small and Medium Enterprise sectors would lead to more job creation in the country.

The President, LCCI, Mr. Babatunde Ruwase, stated this during a press briefing to review the state of the economy on Wednesday.

Although he commended the government’s efforts at extending the intervention funds to relevant business operators, he noted that the range of beneficiaries and economic impact had remained low.

On the recurring fuel crisis in the country, the LCCI president stated that the situation underscored the need to urgently review the policy framework for the petroleum downstream segment of the oil and gas industry.

He added that the key issue was the pricing policy, which had led to disincentive for private investment in the downstream sector, especially refineries and fuel importation.

He said, “We have concerns over the reluctance of government to liberalise the sector and open it up to private sector participation. The concentration of petroleum products supply in the Nigerian National Petroleum Corporation remains a major cause for concern. The arrangement is an inherent entrenchment of state monopoly in the NNPC to the detriment of private investors.

“The midstream and downstream petroleum sector currently suffers from regulatory regime which is negatively impacting growth, investment and job creation in the sector.

“The current model of managing the downstream petroleum sector is not sustainable. It is at variance with the present administration’s vision to diversify the economy and create jobs. It perpetuates the phenomenon of rent economy and is detrimental to economic competition. The truth is that the citizens are the ultimate beneficiaries of a competitive market environment.”

The LCCI president suggested speedy passage of the Petroleum Industry Bill, adding that it would give effect to the much-needed reforms in the oil and gas sector.

He said that the roles of the NNPC and Department for Petroleum Resources needed to be clearly defined, adding that it should not be an operator and still had the regulatory powers.

“A model that would allow for a level playing field for all operators including the NNPC should be adopted,” he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.