During the eight years of former President Muhammadu Buhari’s administration, stakeholders in the Nigerian oil sector including a major player, the Nigerian National Petroleum Company Limited (NNPCL) clamoured for a deregulation of the downstream sector making it a free market ecosystem without the overwhelming control of the government.
The stakeholders in their assertions at various fora said deregulation is the only way to free the downstream sector from the cabals holding it down. They said when the system is fully in place, the issue of scarcity, hoarding, inadequate supplies, moribund refineries and the incessant volatility of prices of fuel and other petroleum products would be a thing of the past.
That couldn’t have been possible without the passage of the Petroleum Industry Bill (PIB) which was finally passed in 2020.
It’s almost three years down the line and Nigerians are still suffering buying petroleum products at exorbitant rates despite the unlimited deposits of crude oil in more than five states in the country in the Niger Delta region and other states in the north.
The stakeholders and policy makers painted the deregulation as a thing that would not necessarily inflict hardship on the lives of Nigerians particularly the masses – low and middle income earners but in reality the effect is the opposite.
In May 29, 2023, President Bola Ahmed Tinubu in his famous inaugural speech told Nigerians that his administration will no longer continue with subsidy on fuel and just less than 24 hours after his declaration oil marketers abruptly increased the price of fuel from N212 per litre to N537 per litre and currently N617 per litre.
These insensitive abrupt increases in prices of petroleum products particularly fuel is in contradiction to the so-called deregulation of the downstream sector Mele Kyari, Group Chief Executive Officer, of the National Petroleum Company Limited (NNPCL) clamoured for.
According to a publication by Nkogbu Oshilim Godfrey, Chartered Institute of Personnel Management of Nigeria (CIPM), Delta State Branch, quoting Reginald (2009) described deregulation of the downstream sector as the opening of the downstream sector to competition where players are to participate at every segment of the value chain and the removal of entry barriers in the supply and distribution of petroleum products.
The PPPRA similarly submit that deregulation of the downstream sector means opening up of the downstream sector of the petroleum industry to competition among all players in the industry.
allowing every player the opportunity to refine or import petroleum products for use in the country in-so far as the product so refined or imported meet quality specification.
Igbikiowubo (2011) defined deregulation of the downstream sector to mean loosening the tight rules governing the administration of the downstream
sector by opening up the sector to competition among all players in the industry.
It means ensuring that every aspect of production, refining, distribution and dispensing of petroleum products is self-financing.
Deregulation involves competitive pricing of products.
To this, none of these objectives have been fully achieved as long as the core intent of deregulation of the downstream sector is concerned.
The country has been able to achieve most of the objectives of deregulation of the downstream sector except one aspect – pricing.
There is still no deregulation of the downstream sector as long as the NNPCL which the government has taken its hands off the company in paper still determining what price to sell to end users.
Overtnews had earlier reported that the factors responsible for the incessant increase of fuel price in the no-subsidy regime is market forces according to Kyari.
“They are just prices depending on the market realities. This is the meaning of making sure that the market regulates itself. Prices will go up and sometimes they will come down also,” he said.
Therefore, it is necessary that all hands must be on deck in ensuring that the sector works not only for the players but the citizens particularly the suffering masses because when there is an increase in prices of petroleum products it has a spiralled down to the poor who really more on the product.