August 31, 2012  by Stanley Opara 3 Comments

The Nigerian National Petroleum Corporation needs close to $3bn (N474.15bn) to upgrade its depots and refineries’ pipeline infrastructure nationwide, its Group Managing Director, Mr. Andrew Yakubu, has said.

The GMD said this on Thursday during a forum in Lagos.

In a presentation titled: ‘Energy Industry Deregulation: The Prospects and Challenges of the Economy,’ Yakubu said close to $3bn would be required to upgrade the pipeline infrastructure.

The NNPC boss, who was represented by the Group Executive Director and Coordinator, Corporate Strategy and Planning, Dr. Timothy Okon, called for the total deregulation of the energy industry, while also stressing the need to mobilise private sector investment in downstream infrastructure development.

He said the move would stimulate competition across the value chain and free huge resources of government for more productive national development programme.

Yakubu said, “This will ensure that petroleum products, supplies are available throughout Nigeria, thereby ending shortages, black market operations and price gouging.

“It will also entrench and strengthen regulatory controls, and eliminate the convoluted price subsidy arising from abuse of the subsidy process.”

According to him, incessant vandalism has rendered the Pipelines And Products Marketing Company Limited’s pipelines and storage depots inoperable.

He, therefore, stressed the need to secure the pipeline infrastructure using a dedicated strategic national infrastructure protection squad, adding that any offender should be tried in accordance with the provisions of the Petroleum Product Distribution Anti-Sabotage Act, 2004.

“All these are to be funded from budgetary savings arising from the removal of subsidy,” he said.

The NNPC boss also called on the National Assembly to accelerate efforts toward the passage of the Petroleum Industry Bill, which prescribes the deregulation of the downstream sector.

He said the current subsidy regime was unsustainable and a major drain on broad national economic development.

Yakubu described the current subsidy arrangement as a disincentive to private sector investment, pointing out that it mainly was benefiting the rich and was open to abuse.

“Subsidy, though well intended, is unsustainably expensive, stunting investment in the sector and not achieving its intended objective,” he explained.

In the same vein, the Chairman, Integrated Oil and Gas, Chief Emmanuel Ihenacho, said the deregulation of the downstream petroleum market had been advocated as a means of increasing marketing efficiency, reducing delivery cost, ensuring a better balance between supply and demand, as well as ensuring greater transparency in the operation of the market.

“The issue of deregulation is one of the greatest challenges, which we currently face in the context of the requirement to sustain operating momentum in ensuring product availability as well as sustaining an effective downstream operation,” Ihenacho said.

via Punch

Posted by admin on Aug 31 2012. Filed under Latest Politics, Oil Politics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry