Deregulation of Nigeria’s oil downstream sector not possible in 2020 — Investigation

By ononibajoshua • 2 weeks ago • 5673 views • 908 comments

By Udeme Akpan

THERE are strong indications that the downstream sector of Nigeria’s petroleum industry would not be fully deregulated in 2020 as the enabling factors, especially structures, institutions and the Petroleum Industry Bill, PIB, are not yet in place. Under a regulated market regime, the prices of petroleum products are supposed to be determined by the forces of demand and supply without much intervention.

But investigation by Energy Vanguard, showed that the Petroleum Equalisation Fund, PEF, which has the responsibility to settle the cost of bridging petroleum products from one part of Nigeria to another, under a deregulated regime, was still performing its role, despite claims that the sector has been deregulated.

Officials of the Fund did not take their calls nor respond, yesterday, but information obtained from its website, stated: “The bridging scheme was originally introduced as a temporary measure during turn-around maintenance, TAM, wherein government sought to encourage and support marketers in transporting petroleum products nationwide.

“Although bridging was meant to be a temporary solution until the refineries were producing back at full capacity, the state of the refineries has worsened over the years.

“In addition, pipeline vandalism by militants and economic saboteurs has been on the increase, to the point where trucks have become the major source of distributing petroleum products in recent times.

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