REIF President supports end of subsidy but wants clear profit range tru capping to attract investors

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  • Say deregulation with sale of oil fields would boost downstream sector with processing

By Codratus Godson

Top investors in Port Harcourt who shape the investment climate in the south-south have hailed the end to price capping by the Nigeria National Petroleum Corporation (NNPC) which they hope means complete deregulation of the downstream sector of the oil economy. This began with subsidy removal in May 2020 and removal of capping in prices of premium motor spirit (PMS) or petrol.

The president of the Rivers Entrepreneurs and Investors Forum (REIF), Ibifiri Bobmanuel, told newsmen in the Garden City that the move would open up the sector for massive investments. Sources said some investors in the region were already putting heads together to take action in area of refinery investment and importation of fuels now that the government would no longer decide prices.

Bobmanuel, owner of a construction firm and now a tractor manufacturing firm, however joined the call for the FG to create incentives that would attract serious investors by putting a cap on what they call range of profit.

The REIF president said the range would decide whether there would be influx of investors or a lull. He said investors have to call up capital from financiers and banks, saying the language of investors is profit.

REIF has been in the fore front of policy advocacy in the economy and business sector in the past few years of its existence. It also organises the most credible governorship election debates in the country in Rivers State with support with the European Union and other organisations without levying the political parties or their candidates whatsoever.

He said while the call is not for another kind of price regulation to be reintroduced, but said there is the need for the petroleum pricing agency to oversee how profit is made and set a range that would not choke investors. He said that it is important for investors to know the profit range allowable for imported PMS so they can calculate the need to set up jetties, storage facilities, distribution channels, etc, that go with a deregulated sector.

Bobmanuel who has interests in maritime projects together with top investors in and outside the country also harped on the timing of the complete deregulation, saying the impending sale of oil fields by the FG is timely because it would mean that serious bidders would be attracted to the bidding rounds. He noted that the future of oil is in processing, saying it is not true that all aspects of oil is dying.

The investors advised Nigeria to focus on oil products in Africa, saying Africa would be the hub of petroleum products for decades as other continents host diminished interests in the sector.

This, he noted, is because the new oil fields would no longer be for investors eager to drill and export alone but for those willing to process the crude into fuels and sell for better profit. He said there is more activity in the processing than in exporting crude.

REIF president said the petro-chemical plants being established by the Dangote Group alone in Lagos were believed to be worth about $22Bn, an indication of the kind of investments and funds that could accrue to Nigeria in a completely deregulated downstream economy.

Bobmanuel had in a previous interview estimated that at least $100Bn worth of fresh investments would head to Nigeria if the oil sector is completely deregulated. He had earlier also advised the FG to use incentives instead of subsidy to attract distribution of petroleum products to far-flung states and cities in Nigeria especially northern states.

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