Yemi Oke: Deregulation Of Nigeria’s Petroleum Market Painful But Needed for Future

Senior Advocate of Nigeria and Professor of Energy and Electricity Law at the University of Lagos, Professor Yemi Oke, has said that the Nigerian government, in deregulating the petroleum market, has carried out the painful but necessary decision of finally doing what is right for the country.

Oke said this in an interview with ARISE NEWS on Monday where he said that before the deregulation was implemented, Nigeria was not in a good place as regards the petroleum sector.a

Speaking of the hardship felt by Nigerians after the Nigerian National Petroleum Company limited increased the price of fuel to N998 in Lagos and over N1000 in other states in a move to deregulate the petroleum market, Oke said, “We’re all in it together as a nation, but we need to understand very clearly when we engage in this kind of crucial national discourse- where are we? We were at a T-junction headed towards total destruction.

“Were we doing well as a country? The answer is no. In terms of capacity to refine, we were nowhere, we were importing. The mathematics of what got imported and what came in was not aligning. So now, we have a singular opportunity with the Dangote and others coming on board to change the narrative.

Citing international examples, Oke said, “You’ve heard of the Saudi Aramco, you’ve heard of Petrobras- top end and lower end. Saudi Aramco was 1933, last 2002 December, not the current financial year, Saudi Aramco contributed $181 billion USD, gain, profit, and it contributed well over 60 per cent of the GDP. Lower end, Petroleum Company of Brazil, Petrobras, in their own currency made about 147 billion which was about $9 billion USD into their economy.

“Petrobras was incorporated after NNPC, it’s a net player, buys petrol, refines, we have Petrobras in Nigeria. That was what the NNPC ought to be doing to add something major to the table for Nigeria, to give Nigeria a big cake that all of us can share. NNPC wasn’t doing that. In fact, NNPC was even taking from the national cake, and we wouldn’t have survived as a nation. And we needed to take those difficult decisions so that we can get at where we wanted to get to.”

Oke then said that Nigeria, despite the pain of current fuel prices, still ranks as the 14th cheapest nation globally for petroleum products, with prices significantly lower than the global average.

“We’re not saying that we should have an expensive product, of course there are other oil producing countries that still sell petroleum stuff for people almost at a giveaway price. But we’ve just started to do the right thing as a country. It’s painful. Of course I bought the fuel too, it wasn’t kind of a sweet experience, but it was needful,” he said.

He praised the role of the Dangote refinery in transforming the market as he said, “We must commend Dangote. It’s a huge investment that we thought was not possible at the time the investment was made. With Dangote coming on board, we’ve started seeing the body language of the boas and hoarders. Things are going to happen.”

Oke also called for effective regulation, urging independence for the sector’s regulatory bodies as he said, “In terms of governance, it’s not only the petroleum sector. I think the first structure that we had was to extricate sector players from the governing structure unlike the- that was my introductory remark, when I said the NNPC was a conflicted entity. NNPC was a player, was also a regulator.

“Now, we have two bodies in charge of regulation, and they should regulate effectively. The essence of sector governance is the independence of the regulator. I want to see those entities being professional, I want to assume they are manned by professional people, competent hands, and they should just regulate effectively. If that is done, of course, of course, the multiplier effect will be positive on the country.”

Ozioma Samuel-Ugwuezi

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