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Full deregulation will soon happen – Oil marketers

By on May 21, 2016

Just as they predicted two weeks ago that the Federal Government would raise the pump price of Premium Motor Spirit, which eventually happened, oil marketers have stated that the country may be heading for a total deregulation of its downstream oil sector.

About two weeks ago, Sunday PUNCH exclusively reported that the Federal Government might increase petrol price based on the statements and calculations of oil marketers at the time.

A few days after the report, the Federal Government announced an increase in the pump price of petrol from between N86 and N86.5 per litre to between N135 and N145 per litre, ushering in a price regime that was described by marketers as a partial deregulation of the downstream oil sector.

Explaining that the current petrol price regime was a sign that the sector might be fully deregulated in the near future, the Executive Secretary, Major Oil Marketers Association of Nigeria, Mr. Obafemi Olawore, said, “What we have now is a step towards deregulation. Deregulation is actually the end point; we are in the process and we will get there.”

Olawore, who spoke as a guest during a television programme monitored by our correspondent in Abuja, stated that the gains of a fully deregulated oil sector could not be over-emphasised.

On the difference between what currently obtains in the industry and what will happen when it becomes totally deregulated, he said, “When we get to deregulation, you will have the refining process included. As it is now, we are looking at only the petrol import side. Deregulation will have to start from the point of refining.”

The MOMAN secretary stated that Nigeria’s oil industry was deregulated in the past, noting that during the period, dealers were made to buy crude, take it to the refineries and pay refining fees.

He explained, “Once that happens, you take your refined products and then you look at your own cost, not the other person’s cost, and you fix a price. That was why you could get a price in Lagos that was different from the one in Ibadan, and that of Ibadan was different from Port Harcourt.”