The Manufacturers Association of Nigeria (MAN) and Lagos Chamber of Commerce and Industry (LCCI) have called on the Federal Government to urgently liberalise the nation’s petroleum sector and create a robust private sector space for private investors to do business.
In an interview with LEADERSHIP Weekend recently, the Director General, LCCI, Muda Yusuf, said, “what we have currently is a state monopoly in the petroleum downstream sector.”
According to him, the situation where the Nigerian National Petroleum Corporation, NNPC is currently the sole supplier of Premium Motor Spirit, PMS or petrol, has been creating varying distortions in the system.
He said, ‘‘The stifling policy environment has made it impossible for the private sector to do business in the sector. There is therefore an urgent need to liberalize the sector and create a robust private sector space for private investors to do business. The current state monopoly model is fraught with inefficiency, transparency issues, perpetuation of culture of patronage and imposes a huge burden on the treasury of government. A fundamental policy review is imperative and urgently needed.’’
Speaking further, Yusuf said the economic effect of the scarcity also manifests in the high cost of transportation which drives the cost of goods and services which he said would naturally impact on profitability of business across all sectors.
According to him, there is also the implication for oil marketers and depot owners in the value chain, product scarcity naturally implies less business, less turnover, less sales and less profits.
Yusuf also stated that the situation had had effect on energy cost, especially for small businesses that powered their generators with petrol.
Also reacting on the situation, the President of the Manufacturers Association of Nigeria, MAN, Udemba Jacobs, suggested that government should take proactive step to revive the local refineries or in the best interest of the country invite the private sector to manage the facilities.
This he said would solve the lingering scarcity that often emerge at festive period when demands were usually high.
“There are strong indications that the lingering scarcity of petrol in the country is complicating ability of government to settle its indebtedness to oil marketers. The petrol scarcity which resurfaced in the first week in December has plunged businesses into difficulties making overall operating environment less competitive,” he said.
Stakeholders in the petroleum sector said the private sector players in the sector had been practically grounded by the huge government indebtedness to them was estimated at about $2 billion.
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