Nigeria’s Vice President, Professor Yemi Osinbajo, says the administration of Muhammadu Buhari is working on a medium-term reduction of the pump price of petroleum products.
Professor Osinbajo said the government had made efforts to ensure that private refineries come on stream to reduce pump price substantially while reducing importation of refined petroleum.
He said the government would reduce the role of the NNPC to its main objective of regulating the sector and ensure a reduction of pump price of petroleum products.
“Unbundling The NNPC”
“We are going to be unbundling the NNPC so that its various components are effective core centres and are able to do their business well.
“In the refining area, we know that at the moment, we have quite a few of the refineries are getting back up. Using those refineries, we have seen the inefficiencies already; we’ve seen the cost.
“You can refine at 60 per cent capacity, but if it costs 20% more than it would cost you if you are refining elsewhere, from the private refinery, then you know that there’s a problem,” the Vice President told Bloomberg in an interview.
“We are going to have private refineries at the site of the old refineries, so they can benefit from the available infrastructure.
“So, we think that in the medium term, we would be able to get cheaper pump price, pump price of oil would be cheaper because we would be importing far less refined petroleum. A lot of that will be produced locally.
“Now, we have well over 30 modular refineries, so we think a lot of modular refineries would come. Many of them, their major concern is feed stock, are we going to be guaranteed feed stock? We are working on that. Once we are able to deal with that, we think that we would be able to reduce pump price and get the whole business of importation of refined petroleum and the NNPC just getting directly involved; we are going to reduce that.
“The ultimate objective of course is to have NNPC regulatory, playing a more regulatory function, as the private sector takes most of the downstream,” the Professor of law stressed.
He pointed out that the government was not considering selling its refineries.
“They are options that are always there. But we think that there are ways we can raise our own potion of contribution to the Joint Ventures. It will only be a last resort and we have not come anywhere near that,” he emphasised.
Breaking down the PIB
On the legislation of the oil and gas sector, he said the Petroleum Industry Bill (PIB) would be broken down and passed in smaller pieces and resent to the National Assembly in the first quarter of 2016.
“Separating the PIB and breaking it up obviously is the way I would think that we’ll proceed…that’s really what the market has been waiting for,” he said.
