JUST IN: Liberalisation, local refining solution to fuel scarcity — Ex-Minister

Former Minister of Interior and a major maritime industry operator, Emmanuel Iheanacho, has said that energy sector liberalisation and local refining of crude oil in the country is the only solution to petroleum scarcity in the country.

Speaking with Vanguard, Iheanacho said liberalisation will result in more investors coming into the industry, a decision that will lead to a drop in pump prices as well as the availability of the products, especially Premium Motor Spirit, PMS.

He explained that with the increase in the production volume, the local demand will be met while the remaining can be exported to other countries.

Iheanacho also said that there is a need for the authorities to engage those involved in illegal refining in a bid to ascertain those that can come into legal refining operations.

His words: “I think that the lasting solution is for the government to liberalize and deregulate the sector. If we continue to regulate the sector, in terms of determining what volumes we are going to import and who should import, there is going to be shortages all the time.

“If we allow market forces to intervene it will be opportunity to supply adequately because people will want to invest. If many investors pour into the market, the price will fall. So, we should really stop the business of providing subsidy in respect of PMS.

“Subsidy does not benefit poor people rather it creates greater difficulty for them. The people who really benefit from the administration of subsidy are people who can afford to buy fuel at market rates.

 So, we really need to consider deregulation as quickly as possible, complete removal of subsidy, the encouragement of free competition.

“The government’s role will be to regulate the quality of the product. Also there are lots of Nigerians that have expressed their interest to become refiners and have made investments. “Therefore, there will be a surplus as regards the products that we can consume ourselves and the remaining we can sell to third parties”.