Business

LCCI flays FG over-regulation of petroleum sector

Published

8 years ago

March 28, 2016

LCCI flays FG over-regulation of petroleum sector

The Lagos Chamber of Commerce and Industry, LCCI, yesterday, knocked the Federal Government for over regulating the oil and gas sector.

According to LCCI, the petroleum industry was flawed with over-regulation and lacked clarity in its operations and hampering the growth, investment and job creation in the sector.

The LCCI also took a swipe at the Department of Petroleum Resources, DPR, accusing it of fighting the symptoms rather than addressing the fundamentals.

The LCCI, in a statement signed by its Director General Mr. Muda Yusuf, said the current model of managing the downstream petroleum sector is not sustainable, insisting that it is at variance with the present administration’s vision to diversify the economy and create jobs. “It perpetuates the phenomenal of rent economy and detrimental to economic competition. It is important to stress that the citizens are the ultimate beneficiaries of a competitive market environment.”

According to Yusuf, the lack of compliance with the regulated price of Premium Motor Spirit, PMS, in parts of the country was largely a symptom of much deeper problems and distortions in the petroleum products supply chain.

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“We have concerns over lack of clarity on the deregulation and liberalization of the sector, as the lacuna policy has put many investments in the sector at risk; while many other investment decisions have been put on hold.

“The concentration of petroleum products supply in the Nigerian National Petroleum Corporation, NNPC, remains a major cause for concern. The arrangement is an inherent entrenchment of the dominance of the NNPC to the detriment of private investors in the sector.”

Yusuf called on the federal government to liberalize the downstream petroleum sector for unfettered private sector participation and investment.

“There should be a level playing field for all operators, including the NNPC. This would put an end to the perennial problem of fuel scarcity in the country and the hardships suffered by citizens due to fuel scarcity. It will also attract more investment, generate more jobs and reduce the pressure on the country’s foreign reserves. It should not be an operator and still have regulatory powers, but have a model that would allow for a level playing field for all operators including the NNPC should be adopted.”

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