Vandalism, theft and years of subsidising local consumption have negatively affected the industry

The Nigerian National Petroleum Corporation (NNPC) Group Managing Director, Andy Yakubu, has said the corporation requires about N450 billion to make the petroleum industry viable.

Yakubu disclosed this on Thursday during an oil and gas conference organised by National Association of Energy Correspondents (NAEC) in Lagos.

He revealed that there was almost non-availability of inland pipeline distribution network, coupled with huge product losses resulting from vandalism and theft. He also said the country was currently facing huge fiscal and financial burden because enormous resources had been spent over the years to subsidise domestic consumption of petroleum products, which amounted to over N2.5 trillion between 2006 and 2010.

In a paper titled ‘Energy Industry Deregulation: Prospects and Challenges to the Economy’, the GMD noted that there was a need to mobilise private sector investment in downstream infrastructure development, to stimulate competition across the value chain.

?Incessant vandalism had rendered the PPMC pipeline and storage depot unoperational. We need to secure pipeline infrastructure using dedicated strategic national infrastructure protection squad,? he said.

?Any offender is to be tried in accordance with the provisions of the Petroleum Product Distribution Anti-Sabotage Act 2004. And also, there will be re-establishment of pipeline and depot integrity. All these will be funded from budgetary savings from subsidy removal.?

Timothy Okon, the coordinator, corporate planning and strategy, NNPC, who represented Yakubu, said although the downstream sector required complete deregulation, it also required huge resources from government in order to facilitate more productive national development programme.

?We will also have to ensure that petroleum products are available throughout Nigeria, thereby ending shortage, black market operations and price increase. There is need to entrench and strengthen regulatory control and eliminate convoluted price subsidy arising from abuse of subsidy process,? he said.

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