Deregulation Has More Benefits For Economy – Oyebanji — Leadership Newspaper
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Deregulation Has More Benefits For Economy – Oyebanji

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The chief executive officer of 11 Plc formerly known as Oil Nigeria Plc, Mr. Tunji Oyebanji spoke with journalists on issues affecting the downstream sector. FESTUS OKOROMADU brings an excerpt.

Recently you held the first draw of the Mobil Super Pill and Win promo, what gains is it expected to bring to the company?
First and foremost, the main objective is to reward our loyal customers who has patronised us at different times consistently all over the country. The aim is also to reward their loyalty shown over the years. We hope and affirm the fact that our product is the best in the market and the highest quality thus far by given them something to show for all their years of patronage.

Do you expect an improvement in the patronage of the product?
Of course, the expectation is that for those who have not used it before, the opportunity of winning a price would hopefully get them to try the product and for those who have been using the product, obviously they are already convinced that the product is good and hopefully with the promotion would enforce their usage of the product the more.

Give us update on your company’s recent merger with NIPCO?
I don’t think I would describe it as a merger because NIPCO is still operating and 11 Plc is equally operating. What happened is that NIPCO bought 60 per cent of the former Mobil Oil to create what is called 11 Plc. But in terms of the state, the whole process and take over of the business is completed over a year ago and the operations is going on very well and the synergy of working together of the two companies has led to greater expansion of the business and more growth.
How has fake dealers of lubricants affected your business?
I would say that not necessarily our business is affected. One of the greatest menaces we face in this business is that of fake and adulterated products.
This comes about by people who wants to cut corners in order to make fast money. The fact that the Department of Petroleum Resources (DPR), and the Standards Organisation of Nigeria (SON), have taken the initiative to pursue all these people and get them off the market, obviously, holds very great deal.First of all for the customers, because some of the customers have unknowingly bought these products and have damaged their cars and engines.
I think the move by DPR is welcomed and needs to be encouraged.

What is your stand on the issue of deregulation of the downstream sector?
Ultimately government has to determine the nature of regulation that affects the business. However, as a private company, we are always on the side of deregulation and competition.
We believe that just as it is in the telecoms,and banking, it should be replicated in the petroleum sector because in that way customers are better served, with better value as more investment would be brought into the industry and it would take it to the enviable level that you see all over the world.
Government has to take the final decision because we are prepared to operate in any environment whether regulated or deregulated, but we believe in principle that deregulation has more benefits for the industry as well as the country’s economy.
People always see deregulation and think about price. It is more than price but about raising the standards and service to consumers. And the only way you can do that is when you have competition in a deregulated environment.

What is your take on marketers importing and looking for refiners oversees?
What is happening today is because the refining capacity of the refineries are insufficient, every body is forced to import, although, today only NNPC can import because of the pricing and that is why you see that it is only NNPC that is engaging in the import. In a deregulated environment people price in such a way that they can recover their investments and that I think, will attract more people into investing in building refineries and eventually with that happening, and improved supply, the price would go down.
Is it not funny that the IOCs are not building refineries in Nigeria at least to take advantage of its huge market potential?
It depends on how you see it. The IOCs are business entities and many have refineries all over the world. Many have over 30 refineries in different places and they look at things from global perspective.

We in Nigeria look at this as if Nigeria is the only country in the world. So, a company which has 30 refineries in different parts of the world brings products from these places.
What has happened in the past is that the IOCs because they have many sources of products, and don’t forget in Nigeria, the conditions that would make it easy for them to invest here is a deregulated environment and it does not exist.
So people should not look at it why are the IOCs not investing here, but should look at the regulatory environment.
If the regulatory environment is right, you would find out that we would be selecting investors and Nigeria are active entrepreneurs and you can see that all other industries where people have been given the opportunities to invest freely and get the returns, has no problem of getting people to invest.
Do you think the environment that would encourage people to make that investment has been created?
We are aware in the past that DPR gave out licenses and little investments have been put in place. If we can fix those problems hindering investment in the petroleum sector, we would have every reason to smile in the nearest future.

How can we solve the problem of low capacities of our refineries?
For me, I would say the answer is to fully commercialise the refineries. I believe the engineers in NNPC are just as qualified as engineers from anywhere else. But the system whereby everything has to go the national assembly to approve this budget and that for the refineries is not healthy. If there are issues with the refineries and needed repairs and NNPC can do it and doesn’t need to go through a long a tedious process, those delays on maintenance and when it should be done are part of the reasons why the refineries are not working at optimum capacity.
So, again, I think it is the environment that is causing it to act the way it is and if you create the right environment there is no reason why those refineries should not work at better capacity as it ought to.

What is your take on NNPC’s monopoly on importation of petroleum products?
I don’t think it is healthy for the country and I don’t think NNPC likes the position it’s in, but we have to make a choice because today without adequate refining capacity we have to import . The question then is that, if that be the case, there is no other person that can do it except NNPC, but I don’t think it is healthy because if everyone is involved in the business, that would push the price down even further because competition would then come in.

How do you react to the excuse of inadequate jetties to berth the product ?

I don’t think presently that is the problem. What happens is that sometimes there is a distortion in the market which prevents people from bringing in products as required and when that happened, shortages occur. And that is when it looks as if facilities are inadequate. And because of scarcity, it has created, you would need to bring double of what you were normally bringing. And then, issues of facilities become an issue. But under normal circumstance, there are enough jetties to receive the product.

What do you think are some of the things that should be put in place to ensure a right environment as you suggested?
Some of them are the Petroleum Industry Bill (PIB) that is currently been worked on and the nature of deregulation that has been on the front burner. If those are worked on, it would bring about great strides for the industry. The whole idea is to have less strangled role of government in terms of allocations, where you get products from. Government’s role is just to ensure that standards are maintained, with the right quality, and quantity from marketers who sell to customers.
These are the things that government should emphasize because I believe the private sector does a better job.

Your opinion on low sulphur fuel?

Currently, people are moving to low sulphur fuel which the world is moving to today, so that we would have cleaner fuel that would be healthy for the environment and for the country. I think we are not moving fast enough in that direction, but it’s a welcome development I would say.



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