FG Set to Fully Deregulate Down-Stream oil Sector

Federal government said it is introducing a full scale deregulation of the down stream sector of the nation’s petroleum industry with a view to saving the huge expenditure on subsidy and channel it to other areas of development begging for government’s attention.
This is decision was a fallout of recommendation by presidential Steering Committee on Global economic meltdown after its meeting last week. The committee decried the huge expenditure of over N1.6 trillion on subsidizing petroleum products in the last three years and vows to put a permanent end to the trend.
To this end, government announced the constitution of a Steering Committee that is expected to resume consultations with all stakeholders towards fast tracking the process of ushering the planned full deregulation era.
The committee which would be headed by the Bauchi State Governor, Mallam Isa Yuguda is to design the action plan and time frame for the commencement of the full deregulation process.
Other members of the committee are Adams Oshiomhole, governor of Edo State, Michael Aondoakaa, attorney general and minister of Justice, Rilwan Lukman, minister of Petroleum Resources, Adetokunbo Kayode, minister of Labour and Productivity, Mansur Muhktar, minister of Finance, Shamshudeen Usman, minister of National Planning, Chukwuma Soludo, governor of Central Bank of Nigeria (CBN), Tanimu Yakubu, chief economic adviser to the President, representative of labour and representative from the private sector.
Government’s endorsement of the full deregulation of the downstream sector of the economy followed the recommendations presented to President Umaru Yar’Adua by the Presidential Steering Committee on Global Economic Crisis.
The move by government is seen as and to months of speculation on the direction of government on the deregulation of the down stream sector.
After an exhaustive discussion at a meeting between President Umaru Musa Yar’Adua and members of the Presidential Economic Committee on Global Economic Crises, a decision to immediately set up the steering committee was reached.
Addressing State House Correspondents at the end of the meeting members of the committee noted that after a more careful study of the situation government realised that there is no alternative to full deregulation.
Members comprise the Ministers of Finance, Dr Mansur Muktar, Minister of Petroleum Resources, Alhaji Rilwanu Lukeman and the Governor of the Central Bank of Nigeria (CBN), Professor Charles Chukwuma Soludo.
The Minister of Finance disclosed that steering the committee which is expected to turn-in its report would meet with all relevant stakeholders to harmonize all identified grey areas that could impede the smooth take-off of the new regime.
The government reasoned that despite several approaches to enhance hitch-free distribution and sales of petroleum products across the country, the Petroleum Product Pricing Regulatory Agency (PPPRA) has continued to put up a high level inefficiency characterized by corruption; thereby making it difficult for government to achieve said objectives.
The minister disclosed that the government spends an average of N640 billion annually on subsidies in relation to petroleum and said “we cannot continue the present regime. It is unsustainable.”
Muhktar disclosed that Yar’Adua had fully endorsed the comprehensive review of the price template, the strengthening of the Petroleum Product Pricing regulatory Agency (PPPRA), open general licensing, offshore refining, boosting strategic reserve, competition bill and the privatization of the four refineries in the country.
He stated that the committee in designing the direction for the full deregulation of the sector, and would meet as well as dialogue with all the stakeholders including labour before the full implementation of the recommendations.
Making his own contributions, Lukman noted that government was no longer prepared to spend any money in the rehabilitation of the refineries stressing that so  much money has been spent in the past which he lamented was mismanaged by those entrusted with the responsibilities of managing the refineries.
“We are not ready to put any money into the refineries again,. No more,” he said maintaining that “our refineries have not been well run in the past. They have been mismanaged and the problem was compounded by the regulatory agencies and that is why we want to address the issue. If we have the correct ambience, people will come to build new refineries,” he emphasized.