A cap on the price of petroleum products is the major reason the downstream oil sector, especially domestic refining, has remained undeveloped, Head Energy Research, Eko Bank Limited, Dalapo Oni, has said.

In an interview, he said once the government fully deregulates the sector, private refineries would sell at market-determined prices to make profit.

According to him, refineries would continue to face financial challenges as demand exited, adding that banks were willing to finance the sector when there were credible financing opportunities.

He however noted there had been a change in government’s approach to pricing.

“There are prospects in the oil and gas sector, nevertheless. It depended on how government approached the issues, pricing and the structure that are required,” he said.

He said one key factor that affected oil and gas investment in Nigeria was lack of trust.

According to him, a lot of investors do not trust that the government will keep to its policy statement.

He berated the House of Representatives for trying to amend the Act of the Nigeria Liquefied and Natural Gas (NLNG), which he described as the best Joint Venture (JV) model in the country.

He said the government should keep to its agreements.