Full deregulation will curb fuel smuggling – Experts
By Yunus Yusuf
Some oil and gas experts on Friday said full deregulation of the downstream sector of the petroleum industry was the only sustainable way to curb smuggling of petrol to neighbouring countries.
The experts said in interviews with the Business Intelligence (TBI Africa ) in Lagos against the backdrop of frequent smuggling of petroleum products outside the country.
Mr Ademola Adigun, an energy consultant, said market liberalisation remained the best option to reduce smuggling of petrol outside the country.
Adigun said competition was the most effective way to control market forces, adding that the best sanctions would not replace the need for price equalisation.
“The best sanctions will not replace the need for price equalisation. The key is still market liberalisation.
“The best option is to allow market forces to control the price,” he added.
Mr Robert Dickerman, the Executive Director, Pinnacle oil and gas Ltd., said ending subsidy payment to marketers would curb smuggling of petrol to other countries.
According to him, if government stops payment of subsidy, the problem will be solved immediately.
Ayodele Oni, Partner, Broomfield Law Practice, said crude oil theft (referred to as illegal bunkering) remained one of the biggest challenges facing the Nigerian oil and gas sector.
Oni said illegal bunkering in Nigeria was the largest globally by volume, with up to 20 per cent of Nigeria’s oil output systematically stolen, illegally refined, sold or diverted.
According to him, “To curb this cankerworm, the federal government may need to adopt the following strategies: tighten security around the Niger Delta region, more scrutiny within export terminals in Nigeria.
“Government also needs to liaise with the local governments where the crude oil assets are located, adoption of modern technologies to monitor pipelines and track crude oil transportation and ultimately, developing Nigeria’s refining capacity, amongst others.”
The expert said the adoption of these strategies would in no small measure help to curb the illegal bunkering of petrol to neighbouring countries.
To reduce these acts of illegal bunkering in Nigeria, Oni said the focus must be placed more on the implementation of existing sanctions, than the issuance of new sanctions.
He said the existing Nigerian laws had already provided for strict sanctions for illegal bunkering.
He advised that the different arms of government must, therefore, work collectively if Nigeria was to stand a chance against illegal crude oil bunkering.
