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FG's goal is to fully deregulate the downstream sector – Minister says

The minister also lamented that the country was producing crude oil even at the price of $27 per barrel.

Nigeria's Oil Minister and OPEC president Emmanuel Ibe Kachikwu addresses a news conference after a meeting of OPEC oil ministers in Vienna, Austria, December 4, 2015. REUTERS/Heinz-Peter Bader/File Photo

He said though the government is not there yet, it will continue to fine-tune the process until the goal is achieved.

According to Kachikwu, “At every given time in the history of every country, you will always have partial deregulation. The reason being that you have to catch up each time and make an amendment, and even if it is just one day, you might have some level of subsidy for that one or two days before it is removed.

“What is important is the goal post; where are we headed? Where we are headed is to try and free the industry, so that it can do its own rules, set its own prices itself. There are few mechanics that we still need to get in place properly. We can’t forget the fact that we still have foreign exchange challenges and that income to government is still very tight.

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“You still have to find a way to balance that. But what is important is what the objective is. The objective is still to fully deregulate.”

The minister also lamented that the country was producing crude oil at $27, adding that no country will keep up production at this level, when there is uncertainty in the global oil industry.

He said “There are lots of things we still need to address. Cost is a key issue. We are still at $27 per barrel. No decent country would produce oil at $27 per barrel at a time when the pricing is unpredictable. Again, we are going to try to get those figures below $18 per barrel.”

Kachikwu also warned that the nation’s refineries might turn to scrap, if no urgent measure is taken to revamp it.

Adding that “Refineries would have to work; it is really not an option anymore. And not only should they work, they have to work very quickly. The reality is that if we do not privatise and we do not concession — which is not what we are doing — then we have a responsibility to find private capital to get them to where they should be.

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“This is because if we do not get them to work, in 2019, I can assure you that if Dangote system works well, we would have scraps, we won’t have refineries, because by then, it would be too late to do anything.”

The minister also revealed that the Federal Government has spent $40b in the Niger Delta over the last four years.

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