Nigeria expects additional revenue from oil liberalisation

An estimated N 301 bn additional revenue is expected to accrue to the Federation Account when the liberalisation of the downstream sector of the oil industry gets under way, the Special Assistant to the Nigerian President on Petroleum Matters, Mr. Funso Kupolokun, has said.
He said: "The additional revenue that will accrue to the Federation Account will be shared among the three tiers of government, the current revenue formula. He said instead of establishing an agency like the defunct Petroleum Trust Fund (PTF) to manage the funds, the Federal Government had decided to directly disburse the money to the states, which will utilise it according to their project priority needs."

Kupolokun, who led the Presidential team on the liberalisation of the downstream oil sector currently on tour of the 36 states of the federation, while on a courtesy call on Governor Sam Egwu said in Abakaliki, Ebonyi State that contrary to fears by a cross-section of Nigerians liberalisation would not increase the burden of the common man. Instead, he said, liberalisation would facilitate private participation and break the monopoly of marketers and the NNPC.
He assured that the liberalisation of the downstream oil sector would usher in sectorial vibrancy, lift all existing barriers to private participation and create new opening in the sector. Kupolokun explained that already, responses to the liberalisation efforts within and outside the country were tremendous.
He added that the Federal Government, to underscore the importance it attached to the exercise, had slated September this year for the licensing of new refineries in the country. He maintained that the present system in the sector was only beneficial to independent marketers and smugglers and had ensured perpetual shortage of petroleum products for the past 10 years. Liberalisation, he said, would provide a reasonable option for participants and reduce the current scarcity being experienced the country.

In his response, Egwu praised President Olusegun Obasanjo for initiating the current sensitisation efforts, stating that the exercise was necessary to assist Nigerians in taking a decision on the issue of liberalisation. He blamed the current apathy by a cross-section of Nigerian towards the exercise on prevalent lapses noticed over the years in NNPC and its subsidiaries, especially in the distribution of petroleum products. He asserted that the corporation was vested with huge responsibilities which militated against its effective operation.
Egwu enjoined the team to sensitise and convince Nigerians on the need to support liberalisation thereby removing monopoly. He added that the present system had enriched NNPC officials who hoard and create artificial scarcity, stressing that "the time has come to allow market forces to prevail, let the money accruing from the exercise be ploughed back to reduce the hardship being experienced by the people."