By Myke Uzendu
Former Vice President and Presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar has called on the Federal Government to liberalise the nation’s downstream oil sector as the current situation whereby the NNPC uses scarce foreign exchange to import fuel at subsidised rates is not sustainable.
Atiku in a statement issued from his media office and signed by his Media Adviser, Paul Ibe on Sunday, reiterated that the focus of the Federal Government should be to aggressively drive the enhancement of the local capacity to process larger quantities of crude for domestic consumption and not be fixated over price fixing.
He emphasized the need to build enabling infrastructure to add value to the economy via the development of petrochemical facilities. This he said, will impact on so many sectors including agriculture, pharmaceuticals, textiles and construction as well as food processing.
According to him, UNIDO estimated that up to 1 million new jobs can be created in Nigeria within the next 10 years through investments in petrochemicals and petrochemicals-based activities.
On the propriety of fixing of the pump price of petrol, he said: “The price of crude and fuel can fall even further or go back up without notice. Nigeria as it stands today does not even have the money to continue to be involved in backstopping fuel price at any level. And the way to go is to liberalise the downstream subsector and not fix prices as long as the marketers can import on their own and sell.”
Atiku said the way out of the logjam is to prioritize investments to ramp up domestic refining capacity and ensure that Nigeria starts to process domestically at least 50 per cent of its current crude oil output of 2 million barrels per day. This, he said, can be achieved within a very short time if government encourages private sector participation under a liberalised downstream.
Atiku Abubakar’s position follows report of another planned adjustment in the pump price of premium motor spirit (PMS). The planned reduction is coming against the backdrop of an earlier one from N145 to N125 per litre in March and later N108 per litre in May.
He lamented that Nigeria is by far the most inefficient OPEC member country in terms of both the percentage of installed reﬁning capacity and the percentage of crude reﬁned, trailing behind countries like Iraq and Libya that have recently been at war or are experiencing civil strife.
He regretted that Nigeria is currently the largest importer of PMS in the world, noting that not only is this counterproductive for the economy, but has signiﬁcant balance-of-trade implications.
“And given the extensive capital outlay that this may command, our goal should be to privatise existing refineries and create opportunity for new ones in our effort to diversify the economy, generate additional revenues and create jobs. The reports that our refineries did not produce petrol in eight months even makes the case for the privatization of the four refineries compelling to pave way for private investment that will spur efficiency, productivity and profitability,” he said.
He, however, welcomed the recent announcement that the refineries would be privatized and urged that the process be accelerated.