This was the submission of stakeholders at the just concluded Oil Trading Logistics (OTL) Africa in a communiqué issued at the end of the conference and made available to The Guardian on Tuesday.
The communiqué noted that petroleum products subsidy is a disincentive to supply chain infrastructure investment, market innovation and consumer value. In view of current realities of low crude oil price and devalued naira, the country can no longer afford the burden of subsidies.
The stakeholders advised government to remove all petroleum products subsidies as a matter of immediate urgency and fully deregulate the downstream petroleum industry.
According to them, deregulation of the industry will attract appropriate investments, promote optimal efficiency, healthy competition, ensure efficient supply of petroleum products to the country and improve the infrastructures in the downstream sector.
They noted that local refining of petroleum products should be prioritized by the country and a deliberate shift initiated from importing products to building refineries.
The communiqué stated: “There is a need for a National Refining Policy which defines the framework for encouraging investment in petroleum refining in Nigeria to facilitate increased national revenue and infrastructure development.
“In view of the significant number of jobs accounted for by the downstream sector of oil and gas, the private sector should be encouraged to drive the growth of the industry through institution of appropriate policies”.
It stressed the need for the Central Bank of Nigeria (CBN) to make it easier in the interim, for importers of petroleum products to have access to Foreign Exchange while a transparent system for setting and publishing gasoline prices should be put in place.
Crude for product swaps, it noted, is a short-term solution for ensuring availability of petroleum products in Nigeria if managed transparently. Nigeria should move towards a collateralized crude for product swap which is more transparent and avoid off-shore processing agreement that is grossly abused world-wide.
“That downstream expansion of our natural gas utilization, with regulated gas price for domestic sales, governance limitation and institutional deficiency constitute both a challenge and opportunity for gas supply.
“To stimulate investment in LPG, multiple taxes and high tariffs should be reduced while development of infrastructure and distribution channels such as, local Cylinder manufacturing, Storage facilities, Filling plants, Bob-tail trucks, gas pipeline for residential consumption, automobiles and petrochemical plants should be encouraged to enable the growth of LPG.
Subsidy on kerosene should also be removed to encourage the growth of LPG consumption in Nigeria”, it added.
It emphasized the need for oil companies to undertake good corporate social responsibility to preserve the communities where they operate and to create a form of investment through job creation; thereby reducing threats of piracy and sea robbery.
