The Managing Director of Rain Oil Limited, Dr. Gabriel Ogbechie, has advocated the need for the Federal Government to fully deregulate the nation’s downstream sector of the petroleum industry.
He gave the advice in a paper, “Deregulation and Sustainable Natural Energy Future Through Natural Gas”, delivered at a web conference organised by the National Association of Energy Correspondents (NAEC)at the weekend.
He said a fully deregulated downstream sector enables marketers to freely source products and leverage supply chain options, improves efficiency and customer-service and allows for better planning and forecasting by marketers.
He lamented the current uncertainty over petrol price and challenges in the country, adding that the Nigerian National Petroleum Corporation has remained the sole importer of Premium Motor Spirit (PMS)
He disclosed that the Federal Government paid N725bn as petrol subsidy in 2019 and spent over N101.65bn on subsidy in Q1 2020
He added: “Subsidy was “discontinued” in March 2020 by the PPPRA following the crash in the global crude oil prices…price modulation. PMS pump price was moved from N145/ltr to N125/ltr as landing cost of PMS was N99.44/ltr .
“In February 2021, subsidy element “returned” as crude price hit $64/bbl and landing cost of PMS increased to N186.33/ltr (while pump price remained at N165/ltr). CBN has devalued the official exchange rate to ₦401/$1 from ₦380/$1 .
“In March 2021, crude price averaged $67/bbl thereby increasing landing cost of petrol to N189.61/ltr .
He advised petroleum marketers in the country to deepen investment in the nation’s gas sector, saying government’s policy on alternative energy and the global drive for energy transition which requires $6bn presents opportunities for marketers to key into same with a view to changing the narrative in the gas sector.
He further implored marketers to invest in gas adoption and utilisation such as cooking gas bulk storage, trucks, filling plants, skids, gas cylinder manufacturing, liquefied natural gas plants, compressed natural gas/ liquefied natural gas trucks, liquefied natural gas re-gasification / compression stations and compressed natural gas filling station.
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