Operators in Downstream re-emphasis need for liberation/ deregulation of sector
Participants at the recently concluded OTL Africa Downstream Week have demanded for the full liberalisation and deregulation of the downstream oil sector, with removal of all hindrances and bottle necks that could hinder the improvement of private investment and market competitiveness; whilst a mitigating policy that will best serve the public and cushion the effect thereof is put in place.
They also demanded that there should be complete elimination of oil theft, security measures such as the Oil and Gas Protection Squad should be implemented as soon as possible, together with full deployment of technology and observance of international monitoring standards.
These were contained in the communiqué issued at the end of the conference. Other resolutions reached are that it is imperative to establish and empower a strong independent regulator to oversee activities in the subsector and ensure implementation of open and transparent rules for the downstream value chain.
Governments and private investors are encouraged to explore and undertake shared infrastructure to ease movement of products particularly trans-regional pipelines and rail connections.
Government should expedite the passage of the Petroleum Industry Bill which should cover full deregulation of the downstream sector. While the Cabotage Act as well as the Local Content Laws need to be optimised in implementation by NIMASA and other regulatory bodies in the downstream sector to ensure more participation of Nigerians.
The communiqué also wants financial institutions to be encouraged to develop special lending arrangements that will allow players in the downstream sector access funds at single digit interest rate to facilitate and sustain growth.
It strongly advocated the streamline of policy interventions, inter-agency collaboration between key branches of Government and Government should identify supervisory mechanisms to harmonise policy engagements.
According to the communiqué to encourage increased local and foreign investment in the downstream, government must prioritise enthronement of a stable and predictable foreign exchange policy. Industry calls on the Central Bank of Nigeria, Federal Ministry of Finance and Ministry of Petroleum Resources to jointly address this as a matter of urgency.
There was also an advocacy for urgent review the administration of the current ineffective foreign exchange intervention in the downstream sector in view of the timing gap between the offer of forex and the opening of letters of credit, which often erodes the value and usefulness of the offer.
“There is need for government intervention by way of policy on LPG to facilitate its growth and make it easily available and accessible. While it should urgently adopt a policy of low sulphur fuel specifications Afri-4 and 5 to protect the health of our people and the environment.
Government it stated should reduce the duty payable on the acquisition of vessels by indigenous operators to make them competitive with their foreign counter-parts.
Olusola Bello