FUEL SUBSIDY REMOVAL: PHCCIMA WELCOMES PRIVATE SECTOR PARTICIPATION IN THE DOWNSTREAM DEREGULATION OF PETROLEUM RESOURCES

| January 18, 2012

Dr Vincent Furo

PHCCIMA President
Following the heated debate that has greeted the recent removal of fuel subsidy, Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture, (PHCCIMA) has said as the mouthpiece of the organized private sector (OPS) it is in full support of the federal government deregulation plan as it encourages private sector participation in the downstream deregulation of petroleum resources.

In a joint statement issued by the President of PHCCIMA, Dr. Vincent Adonye Kingston Furo and Chairman of PHCCIMA Oil and Gas Trade Group, Chief Franklin Dandison Gbupo it states;

“We are of the view that any sector of the economy, like the downstream of Petroleum Resources whose conditions do not promote Private Sector Participation does not represent a good economic decision. This is drawn from the fact that Government alone cannot successfully drive that sector. The Organized Private Sector (OPS) must be given the right incentive and environment to operate so that one of the advantages of competitive production can play itself out in determining the price of the products in a medium and long term run.

An analogy of this position can be seen with the liberalization of the
telecommunication sector, where the early private sector players in the
Industry like MTN and ECONET started and traded their SIM Cards for as high N16,000 and more. However, today with other players (on term) like GLOBACOM and ETISALAT allowed entry, SIM Card price go now for as low as N100 and is enjoyed by the masses who are benefitting from the boom. This is possibly attainable in the downstream petroleum sector if well harnessed.

A good number of Private Refineries approved by the Federal Government have not been able to take off because of the burden of subsidy on the sector. Removal of these impediments by Government is the rational thing to do to open up the sector to growth, employment opportunities and wealth creation for the smaller businesses.

Port Harcourt Chamber of Commerce is not unaware of the temporary pains of the short term effects, but this will time out with the medium and long term advantages. We call on the Federal Government to implement programmes that will cushion the short term effects on the masses with its Reinvestment and Empowerment Programmes, and to also endeavour to build trust and
confidence to show it means well for the people. We also use this medium to appeal to the masses, labour leaders, civil liberty organizations and opinion leaders who have voiced their opposition to the programme to give Government one more opportunity to prove its worth.

As a Chamber we believe that as much as Government is of the view that subsidy poses large financial burden on it, the confidence of the people must be gained by fighting corruption, reducing high costs of governance and adequate delivery of their promises to the people.

Therefore, people of high values and integrity should be appointed to manage and implement the economic stimulus on the key areas of intervention as Agriculture, Power, Education, Health, ICT, Water Supply, Roads, Rail Transportation, Public Works and Youth Empowerment.

In conclusion we must emphasize that the accrued funds from the subsidy burden is not only on the Federal Government alone,State Governments, and the Local Government should articulate programmes from the subsidy savings to impact on their people”.

On the recent reduction of pump price to N97, the statement commended the wisdom displayed by President Jonathan describing him as a leader that shows concerned for the well being of the people and the nation.
The statement however advised that the masquerades behind the various sharp practices in the petroleum sector must be exposed and made to face the wrath of the law for enable the country move forward.

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Category: Press Release

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