Experts make case for product pipelines concessions to achieve efficiency  

Industry experts in the petroleum downstream sector of the economy say the concession of product pipelines has become necessary in order to address some of the major issues affecting Nigeria’s downstream sector.

In their various summations at the 2016 Business Outlook: Petroleum Downstream Perspective forum organised by Petroleum Downstream Group of the Lagos Chamber of Commerce and Industry observes that a complete deregulation of the downstream sector would encourage the construction of new refineries; liberalisation of fuel import and open access to oil and gas facilities such as pipelines, depots, jetties etc.

Reginald Stanley, managing director, Petrowest Energy Resources Limited in his presentation at the event that the country’s refineries had been producing below 20 per cent capacity in the last decade which insist had encouraged massive importation of petroleum products in the country and fuelling inefficiency and loses of revenue.

He pointed out that 90 percent of the country’s pipelines were out of operation which had necessitated high road transportation for distribution of petroleum product.

Stanley stressed on the need for NNPC fuel import to be reduced and policies put in place for marketers to drive the downstream.

He reiterated the need for NNPC refineries to partner investors based on a 51 and 49 percentage arrangements and the need for diversification in the downstream, given the excess capacity of 129 depots.

On his part, Tunji Oyebanji, Managing Director, Mobil Oil Nigeria Plc noted that easing of regulatory environment would boost investor considerations and hence bring about a competitive environment which would in turn bring about self sufficiency in local refining.

Oyebanji observe that the supply challenges the country was experiencing would not go away until government reviewed its import allocation system, which gives NNPC a higher slot for the importation of PMS.

He disclose that the sector had not progressed due to the pervading participation of government in the affairs of the industry, and until that was cleared, “we will not see the benefits that accrue to the consumers and the economy at large.”

The Mobil Oil Nigeria Plc boss enjoin the Federal Government to concession the pipelines and sell 60 per cent share of the country’s refineries to make them more profitable, saying the regulation of the downstream sector was the reason for all the inefficiencies and distortions in the system.

He decried the low investment in the retail sector by operators and called for the consolidation of privately operated tank farms in the country.

KELECHI EWUZIE