Against clamour from both major marketers and independent marketers for full deregulation of the petroleum industry, expert in the industry have called on the Federal Government to disregard plans, saying such actions could trigger more hardship for the citizens as well as the economy.
This call was made at the 6th Emmanuel Egbogah Legacy Lecture Series, themed: Managing Petroleum Revenue under volatile price dynamics, held in Port-Harcourt, last week.
Making this call, a renowned petroleum economist and the President, Nigerian Association for Energy Economics, NAEE, Professor Wumi Iledare, stated that current realities in the economy cannot sustain the shock that will emanate if fully deregulated.
According to him, “We cannot do full deregulation of the petroleum industry, because that will create a lot of economic shock. We can do a partial deregulation, which cannot afford to tie the price of petroleum to exchange rate, because that is too volatile.
“That brings me to governance of the money supply, which is the Central Bank Nigeria, CBN.”
He charged the National Assembly to be equipped on understanding issues bedevilling the economy for adequate policing.
He said, “Some of the challenges we have is how equipped are the senate committee on banking and finance who are the principle staff of that committee and how much knowledge do they have.
“Those are the governance issue that has to be addressed. The economy, governance and the entire society is primitive when it comes to economy system management.”
He further posited that the country’s petroleum resources can no longer support its quest for revenue generation, adding that crude decline is not about to rise in the nearest future.
“Nigeria dependent on petroleum as a source of revenue is over. Oil will not be able to support our aspiration in terms of revenue generation and that is reflected to the inabilities of the States to meet up its responsibility of paying workers.”
With respect to alternative sources of energy, he added that, “It is going to take a lot longer for the country because it is an expensive alternative. So in that case, if we are going to change the parting and use oil and gas as a source of power, we will need it for the next 20 years to propel our economy in terms of energy source and not revenue.”
“There is nothing wrong in having energy supply mix. If you look at Nigeria, perhaps, solar energy can be developed in the North, where the sunlight has a long extended period and the intensity of energy that comes in there is higher.
“Also, there is nothing wrong in using petroleum in the South- South region and South -East region to propel power. We need to revisit the coal city like Kogi, Anambra and Enugu to generate power for that region. That is what we call energy diversification.”
He maintained that “If this economy is to be sustained, the entire 2.2 million barrels of oil capacity produced is not enough to sustain the economy.”