Nigeria will experience massive increase in
inflationary rates from its present 16.47 per cent to over 20 per cent soon, if the decision by the Federal Government, to fully deregulate the downstream sub-sector of the oil and gas industry, is anything to go by.
The country increased its inflationary rates by 0.17 per cent last December to 16.47 per cent in January, in January, a development, which
suggests that the inflationary rates would still go up, more so that Nigeria’s is battling recession.
In a virtual press briefing organised recently, by the National Association of Energy Correspondents (NAEC) in Lagos, the Managing Director, Double 11, formerly Mobil Oil Nigeria Limited, Mr Tunji Oyebanji, said increase in the rates of inflation is expected, except the stakeholders, including government, urgently proffer solutions to it.
The briefing aimed at seeking solutions to past, present and future issues in the industry and Nigeria’s economy in particular.
According to him, one of the notable features of full deregulation of downstream sub-sector is astronomical rise in the prices of goods and services, urging the government to look for means of mitigating the effects of such activities.
” There is no doubt that prices of commodities would not shoot up, once the government deregulate the sub-sector fully. The reason is because the effects of full deregulation would spill over on others sectors such as transportation and agriculture. Prices of petroleum products would go and the development would lead to high cost of transportation of goods and services.
Nigeria, Oyebanji, said should put the issue of subsidy removal aside and focus more on the effects of such removal.
On local refineries, he said the need to find out the state of new refineries accross the country, would help in ensuring whether there would be optimal processing of crude oil soon.
He regretted that the country is still importing fuel, despite the plans, by the government to ensure optimal production of the product.
It would be recalled that the passage of Petroleum Industry (Bill),by the National Assembly, is fixed for 2021 and that one of the issues,which the bill expected to address is regulation of the downstream sub-sector of the industry.