The Minister of state for petroleum, Ibe Kachikwu has revealed that the Federal Government’s goal is to deregulate the downstream sector of the petroleum industry.
The minister also lamented that the country was producing crude oil even at the price of $27 per barrel.
He said though the government is not there yet, it will continue to fine-tune the process until the goal is achieved.
According to Kachikwu, “At
every given time in the history of every country, you will always have
partial deregulation. The reason being that you have to catch up each
time and make an amendment, and even if it is just one day, you might
have some level of subsidy for that one or two days before it is
removed.
“What
is important is the goal post; where are we headed? Where we are headed
is to try and free the industry, so that it can do its own rules, set
its own prices itself. There are few mechanics that we still need to get
in place properly. We can’t forget the fact that we still have foreign
exchange challenges and that income to government is still very tight.
“You
still have to find a way to balance that. But what is important is what
the objective is. The objective is still to fully deregulate.”
The
minister also lamented that the country was producing crude oil at $27,
adding that no country will keep up production at this level, when
there is uncertainty in the global oil industry.
He said “There
are lots of things we still need to address. Cost is a key issue. We
are still at $27 per barrel. No decent country would produce oil at $27
per barrel at a time when the pricing is unpredictable. Again, we are
going to try to get those figures below $18 per barrel.”
Kachikwu also warned that the nation’s refineries might turn to scrap, if no urgent measure is taken to revamp it.
Adding that “Refineries
would have to work; it is really not an option anymore. And not only
should they work, they have to work very quickly. The reality is that if
we do not privatise and we do not concession — which is not what we are
doing — then we have a responsibility to find private capital to get
them to where they should be.
“This
is because if we do not get them to work, in 2019, I can assure you
that if Dangote system works well, we would have scraps, we won’t have
refineries, because by then, it would be too late to do anything.”
The minister also revealed that the Federal Government has spent $40b in the Niger Delta over the last four years.
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