Degraded infrastructure 'compromises Nigerian deregulation plans'

27 January 2010

Government agencies and private organisations have urged the minister of petroleum resources not to go ahead with the full deregulation of the Nigerian downstream oil sector until all the necessary infrastructure improvement is done.

Dr Rilwan Lukman was quoted by the Daily Champion as saying that the policy of deregulating and abolishing fuel subsidies would only be implemented when all refineries were working well and other infrastructural challenges associated with the industry were fixed.

He said the government planned on collaborating with the private sector to rehabilitate pipeline facilities and make other improvements.

"If our refineries are working at optimal capacity, we can then begin to talk about deregulation. But for now, no specific date yet," he added.

Dr Lukman explained that deregulation at this point would risk aggravating the market's negative aspects, such as the scarcity that plagues it.

The Nigeria Labour Congress was recently quoted by the Vanguard as expressing concern that deregulation would be "an attempt to carry out sharp increases in the prices of petroleum products".