FUEL SCARCITY: Capt Iheanacho Preaches Deregulation, Makes Case for Nigerian Refiners


Even as Nigeria continues to battle the scourge of fuel scarcity, frontline Master Mariner and Chairman of Integrated Oil and Gas Limited, Capt Emmanuel Iheanacho has said that deregulation of the Premium Motor Spirit (PMS) remains the only recipe to end scarcity in Nigeria.

Capt Iheanacho, a former Minister of Interior, is the Promoter of the 20,000-barrels per day Eko Petrochemical Refinery situated at the Tomaro Islands in Lagos. He also owns the popular Integrated Oil Tank Farm at Ibafon, Apapa Lagos.

In a chat with maritime journalists in Lagos on Thursday, Capt Iheanacho also called on the Federal Government to render support for Nigerian Investors who have demonstrated interest in building refineries in the country.

According to him, the Federal Government’s continuos payment of subsidy on fuel is doing more harm to the poor masses than good.

He said that when deregulation comes in, prices of the fuel would crash through healthy competition among investors, adding that, all the government would have to do is, control the quality of product being imported

He noted that for now, the government have not demonstrated enough commitment and support for investors who have committed their investments into building modular refineries in Nigeria.

Speaking he said “The lasting solution to the fuel scarcity is for the federal government to liberalize and deregulate the sector, if we continue to regulate the sector in terms of determining what volumes we are going to bring in, there is going to be shortages all the time.

“So, we need to allow market forces to intervene. If there is an opportunity for supplying profitably, people would go and bring their money and invest. If too many investors pour into the market, the price would fall and a lot of investors would also pull out. This is exactly what happened in respect to AGO trading.

“They deregulated the AGO, the price went up, but then, it came to an equilibrium level where it simply oscillates back and forth.
So, we should really stop the business of providing subsidy in respect to the PMS, the subsidy does not really benefit the poor people, rather it creates greater difficulty for them.

“The people who actually benefits from the administration of subsidy are people who can afford fuel at market rates, so we really need to consider Deregulation as quickly as possible, then encourage competition. The government’s role would now be to regulate the quality of product that is supplied.

“There are so many other things we can do to make sure that the fuel is available and affordable.

“The intervention of Nigerian refiners by being able to refine our crude, if the crude is down in the ground and we produce it, and there are lots of Nigerians who have expressed an interest to become refiners and have made investments, the government should make it possible for them to emerge as the refiners, so that there would be a products that we can consume ourselves, and the excess can be sold to third parties.

“All what we are talking about is Deregulation and encouraging local refiners, they have to be coordinated, they don’t just happen like that, you have to seat down and have a think tank, it is not just to talk about it, but to do something about it.

“An example if this is the ingress into the industry of local refiners, we have been talking about it, we have articulated these plans, we have hired foreigners who have built refineries elsewhere to come and articulate the plans for us, but there comes a time when government has to play it’s part, apart from being the one that gives license to establish and authority to construct.

“They have to come in and guarantee feedstock availability to these refiners, they have to guarantee that they would be inna position to buys the products, they have to come and partner with those Nigerians as strategic investors in the sector and other people like the Chinese who are very kin, would come in.

“But if you stay aloof and you are talking about it, but you do nothing about it, we would continue to wallow in this unsavory situation.

“There are small modular refineries of 5,000 barrels, 10,000, barrels and 20,000 barrels per day, there is a refinery in Port Harcourt which isn1,000 barrels per day and it is producing and really making profits” he said

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