The Lagos Chamber of Commerce and Industry has expressed the urgent need to review the policy framework for the petroleum downstream segment of the oil and gas industry.
The President, LCCI, Mr Babatunde Ruwase, stated this during a press briefing to review the state of the economy.
Ruwase bemoaned the recurring fuel crisis in the country, stating that the situation has underscored the key issue, which is the pricing policy, which had led to a disincentive for private investment in the downstream sector, especially refineries and fuel importation.
“We have concerns over the reluctance of the government to liberalize the sector and open it up to private sector participation. The concentration of petroleum products supply in the Nigerian National Petroleum Corporation remains a major cause for concern. The arrangement is an inherent entrenchment of state monopoly in the NNPC to the detriment of private investors.
“The midstream and downstream petroleum sector currently suffers from a regulatory regime which is negatively impacting growth, investment and job creation in the sector.
“The current model of managing the downstream petroleum sector is not sustainable. It is at variance with the present administration’s vision to diversify the economy and create jobs. It perpetuates the phenomenon of rent economy and is detrimental to economic competition. The truth is that the citizens are the ultimate beneficiaries of a competitive market environment.”
The LCCI president suggested speedy passage of the Petroleum Industry Bill, adding that it would give effect to the much-needed reforms in the oil and gas sector.
He said that the roles of the NNPC and Department of Petroleum Resources needed to be clearly defined, adding that it should not be an operator and still had the regulatory powers.
“A model that would allow for a level playing field for all operators including the NNPC should be adopted,” he said.