Nigerian governor campaigns for downstream sector liberalisation

Oct 29, 2001 01:00 AM

Governor Segun Osoba of Ogun State has declared that the cost of inefficiency arising from the mismanagement of the oil sector was so much that liberalisation of the downstream sector of the petroleum industry, was the only viable option.
Speaking when the Technical Campaign Team on the Liberalisation of the Downstream Sector of the Petroleum Industry visited the state as part of its nationwide sensitisation mission, Osoba cited the tremendous improvement in the aviation industry since its liberalisation to buttress his argument that if similar policy was extended to the oil industry, it will be beneficial to the country.
"There was a time in this country when Nigeria Airways was the sole airline and if you want to go to Kano, you may have to be at the airport by 6.00 AM in the morning and your trip might not be ready until 9.00 PM. Thereafter, you would be told due to operational reasons or circumstances beyond our control, we are sorry, the flight is cancelled", the governor stated addingthat you might have to spend two days in Lagos to travel.
However, he said the advent of the private sector participation in the industry made travelling around the country so easy and cost effective that most people depart for Abuja in the morning, conduct their businesses and return to their destination on the same day.

He said if that was all liberalisation was about, then, it was good for the oil industry to save enormous wastages that had enveloped the sector over the years.
"The situation we have now is one in which the NNPC has absolute monopoly and there is a lot of inefficiency, a lot of mismanagement and a lot of wastages", Osoba stated adding that a change was inevitable for confidence to be restored to the sector. However, while urging the people of the state to embrace the change, he counselled that even for those who may disagree, they have to take the message of liberalisation as food for thought.
He said the present system which breeds scarcity and adulteration of products needed to give way citing an example of how adulterated fuel he purchased for his jeep in 1997 nearly rendered the vehicle immobile. While presenting the statistics on the desirability of the policy, the team leader and Special Assistant to the President on Petroleum Matters, Mr. Funsho Kupolokun stated that the country was losing about $ 3 mm annually from subsidising petroleum products.

He said the subsidy was not being done for the vast majority of the populace since only a tiny minority and foreigners as a result of smuggling that were reaping from the subsidy regime. The Special Assistant said the alternative to this unfortunate situation of "robbing Peter to pay Paul", was to liberalise the sector to allow for competition and efficiency adding that the multifarious problems that have beset the sector arose because the government wrongly "poked nose" into an area that it had no business getting involved.
He said it was better for the government to use the expected revenue from liberalisation to subsidise education, health and other areas that would touch the lives of a greater majority of people. He said it was better for the government to use the expected revenue from liberalisation to subsidise education, health and other areas that would touch the lives of a greater majority of people.

Source: This Day/All Africa Global Media
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