The Centre for the Promotion of Private Enterprises (CPPE) has stressed the need to consummate the reform process in the oil and gas sector with the full activation of the Petroleum Industry Act (PIA).
CPPE Chief Executive Officer, Dr Muda Yusuf, said this at the centre’s maiden quarterly press conference on Monday in Lagos.
Yusuf said that in the meantime, all charges, import duty, levies and taxes on petroleum importation should be suspended to moderate the cost of fuel as an interim measure.
He said that the ultimate solution was to revisit the deregulation engagement with stakeholders to pave way for a market driven, private sector led investment framework, with the government playing a regulatory role.
This, Yusuf said, was the option the country had to stop the bleeding, distortions, smuggling and loss of investment that its petroleum downstream sector had suffered over the years.
He noted that a private sector led oil and gas sector would free resources for investment in critical infrastructure such as power, roads, the rail systems, health sector and education.
Yusuf said that this would unlock the huge private investment potential in the downstream oil sector, especially in petroleum product refining, and reduce smuggling of petroleum products among others.
“It will eliminate the patronage mentality, rent seeking activities and corruption that currently characterise the downstream oil sector and create more jobs for the teeming youths of the country in the downstream oil sector as investment in the sector improves.
“The investment opportunities in our Oil and Gas sector are huge, considering our crude oil reserves and the even bigger prospects in gas.
“We have a population now estimated at over 200 million people and that is a big domestic market for energy, presenting huge opportunities for the downstream investments.
“The summary is that the dominance of the public sector in this space has considerably subdued the progress and development of the oil and gas sector, and by extension the Nigerian economy,” he said.
Speaking on power sector, Yusuf said reforms had not delivered the desired outcomes, with the entire experience giving privatisation a bad name.
He noted that issues of due diligence, technical capacity, financial capacity, political interference, metering issues, estimated and arbitrary billings, payment defaults to the generating companies, etc. beguiled the sector.
“We also have concerns about the capacity of the Nigerian Bulk Electricity Trading [NBET] Plc to effectively play its role of providing liquidity to support the electricity supply chain.
“Evidently, there are diverse internal and external variables impeding the achievement of the desired outcomes of the power sector reform.
“It is thus imperative to have a more holistic approach to the multifarious challenges hampering power delivery.
“There should be greater emphasis on off grid solutions in order to ensure the decentralisation of the power sector as the country is too vast for the highly centralised regime of national grid.
“The continued ownership and control of the transmission component of the power supply chain is also a challenge to grapple with,” he said.
Yusuf also pushed for the rapid promotion of renewable energy solutions through the enactment of policies that would make it more affordable.
“The current high cost of acquiring renewable energy installation has been a major impediment to the access of this energy solution.
“We submit that import duty and taxes on solar equipment, solar batteries and inverters should be scrapped to improve access to renewable energy solutions,” he said.