Recently, indications emerged that the country might soon embrace full deregulation of the petroleum sector, as the seemingly progressive eight Senate called for total deregulation of the premium motor spirit (PMS) otherwise called petrol.
The indication was given by the chairman, Senate Committee on Downstream, Senator Marafa Kabir, who contended that total deregulation was the solution to the country’s perennial problems in the oil sector, adding that the eighth Senate was determined to give Nigerians a direction in the downstream in order to curb the corruption in the sector. As anyone who is familiar with the workings of the sector knows, full deregulation of the sector will strengthen agencies such as the Department of Petroleum Resources (DPR) and make them to deliver on their constitutional mandates.
Full deregulation of the sector will completely eliminate the scams associated with the subsidy regime. For instance, the Senate had to order an investigation into subsidy claims because the Nigerian National Petroleum Corporation (NNPC) collected over N5 trillion as subsidy claims since 2006.
Again, competition will drive down prices in the long run. Deregulation will also promote local refining of crude oil. It is fair to admit that it will initially cause an increase in the price of petroleum products because issues such as landing costs will have to be factored into the equation, but the country will benefit in the long run.
Beatrice Ikoli
Lagos.
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