Prof. Wumi Iledare, Former President of the Nigeria Association of Energy Economics (NAEE), has advised the federal government to engage in gradual deregulation of the downstream oil sector until the passage of the Petroleum Industry Bill (PIB).
Iledare made this known in an interview with the News Agency of Nigeria (NAN) in Abuja on Sunday while reacting to the recommendation of the Nigerian Governors Forum for the N385 pump price of petrol.
Read Also: Nigerian Navy cancels 65th anniversary over COAS death
“Only the Minister of Petroleum has the power to fix Petroleum Product Price as it stands now. Others are only advisory.
“I don’t see deregulation taking place without the PIB becoming an Act. Fixing the price at N385 does not make economic sense for now.”
It will be recalled that the Nigeria Governors’ Forum (NGF) on May 20 at its virtual meeting considered the report of a committee headed by Kaduna State Governor, Malam Nasir El-Rufai.
The Forum accepted the committee’s recommendation that backs full deregulation of petrol and suggested that the pump price of the product should hover around N385 per litre.
Iledare said that the only way to ensure the full deregulation of the downstream oil sector was by the speedy passage of the PIB.
“One would suggest gradual and partial deregulation over a specified period backed by legislation for perpetual decontrol.
“In the process, there can be a parallel market with instruments in place to avoid round-tripping.
“NNPC as part of fulfilling social responsibility goal can institute price modulation with a sunset date in mind for public transporters.
“And the downstream sector can then be open to private willing sellers and willing buyers,’’ he advised.
According to him, instant deregulation by fiasco for the enhancement of federation account as proposed by the governors is as bad as subsidy payments for the economy.
“The unintended consequences of fixing the price by fiasco will create an unprecedented and dangerous shock to the Nigerian economy.
“Deregulation must be gradual and not shocking. Don’t fix any price, let it find its level with time,’’ he added.