‘Downstream deregulation needed to sustain economy’

To sustain the Nigerian economy and preserve the country’s dwindling foreign reserves, oil marketers under the aegis of Major Oil Marketers Association of Nigeria (MOMAN), have called for the deregulation of the downstream segment of the petroleum industry.

The Association stressed that the current subsidy regime was not sustainable considering the contraction being felt in the economy. According to the Executive Secretary, MOMAN, Clement Isong, deregulation will not only make the downstream end of the market competitive, but will also attract investments from Nigerians and foreigners into the sector.He said deregulation would encourage the interplay of demand and supply, which would have a medium to short term impact on prices and subsequently ensure stability.

The Central Bank of Nigeria (CBN), had urged the Federal Government to carry through its planned deregulation of the downstream oil sector to forestall further inflationary pressure on the economy.

According to CBN, the mere talk and rumours of deregulation was worsening the state of inflation on the economy, of which it was time government carried through the reforms to bring an end to the uncertainty in the economy, driven by the current subsidy regime.

Financial experts had urged the government to implement the policy (deregulation); stop the subsidies and ensure there are sufficient petroleum products with transportation bottlenecks addressed. This, they explained, would address inflation, better the economy and ameliorate the state of economic uncertainty that had characterised the polity.

Isong said the government was free to make wide consultation on the subject, and decide on its most ideal approach to deregulation, adding that oil marketers were very willing to offer expertise and suggest methods that would better the lives of Nigerians, the industry, and the economy at large.

The presidential candidate of the Allied Congress Party of Nigeria (ACPN), Dr. Oby Ezekwesili, had also called for the deregulation of the oil sector to boost the country’s economy.She also posited that if the sector had been subjected to the competition and discipline of the market, it would have aided the development and growth of the country.

According to her, the N1.3 trillion disclosed by the Minister of State for Petroleum Resources, Ibe Kachikwu, that the federal government spends yearly on fuel subsidy was a waste of resources.She said this was almost the same amount that the current government spent on constructing roads, equipping hospitals with medicine, funding the universities and working on power.