An energy consultant, Ademola Adigun, says fingerprinting Nigerian crude supported with international advocacy will permanently address frequent crude oil theft in the country.
Adigun said this in an interview with the Business intelligence (TBI Africa ) on Thursday in Lagos.
According to him, fingerprinting is a process that gives the crude oil a unique identifier from Nigeria.
“Many types of oil exist, we may need to tell one oil from another during a spill. The chemical composition of oil found in the environment yields important clues about its origin.
“The process of determining where a sample of oil (or hydrocarbon residue) originated is what we call fingerprinting.
“This is the way it is done with diamond in Liberia and other countries. It makes it difficult to purchase.
“On crude oil theft, the focus should be detailed implementation of the Petroleum Industry Act (PIA) particularly the Host Community sections. That may also reduce it.
“But a more permanent solution is to consider fingerprinting Nigerian crude supported with international advocacy,’’ he said.
On fuel scarcity, Adigun said that full deregulation of the downstream sector of the petroleum industry remains the best option to resolve frequent scarcity in the country.
He said that full deregulation would automatically eliminate subsidy, adding that subsidy payments was harmful to the economy.
According to him, elimination of subsidy will also allow investment into the critical areas needed by the private sector.
The expert said: “lingering fuel scarcity is a function of price. Full deregulation will allow for more imports by players other than Nigerian National Petroleum Company Limited (NNPC).
“The current monopoly of petroleum importation by NNPC is part of the problem.
“Private sector companies have proved reliable to a large extent. Is it not time we have a real midstream?
“There are no other short-term measures. NNPC does not have dollars to issue orders for the needs of Nigeria.
“The possible short term measure is to adjust prices and partial removal of subsidy. Then there is the challenge of the 0.5 per cent charge on products from the value chain in the downstream.
“That should reduce to 0.2 per cent until growth is achieved in that sector.”
Adigun urged the government to ensure the proper implementation of PIA and remove the monopoly power of the NNPC to foster required economy development in the oil and gas sector.
On refinery, Adigun said, “the problems of the refineries go beyond privatisation.
“The refineries will not be profitable in a regulated environment.
“Refinery margins are low. So, changing the management will not guarantee success.
“And who will be interested in purchasing our refineries now with Dangote coming on stream in the second quarter of 2023?
“What is the point of holding moribund assets
