FG Approves Marginal Oil Fields Licensing
By Adedapo Adesanya
President Muhammadu Buhari has approved the conduct of marginal oil field licensing bid round before the end of the year.
This was made known by the Minister of State for Petroleum Resources, Mr Timipre Sylva, on Thursday in Abuja.
The Minister said that the rounds will be held after issues surrounding the fiscals and other processes had been addressed.
Business Post had reported that the federal government plans to auction small oil fields this year to raise funds in the midst of the crisis facing the oil market in terms of price and demand.
The Minister yesterday also disclosed that Petroleum Industry Bill (PIB) will be passed, adding that work has been concluded on the PIB.
According to him, the ministry was on the verge of presenting the bill to the President and the Federal Executive Council (FEC) for approval, before presenting the bill to the National Assembly.
Speaking further on deregulation of the downstream sector of the petroleum industry, the Minister pointed at the failure of oil marketers to reduce the cost of diesel even with fall of crude oil price, as one of the reasons the federal government will not allow marketers to wholly determine the pump price of petrol and household kerosene.
He said even though the sector was deregulated on March 19, 2020, the government will continue to intervene to safeguard consumers of the commodity from being exploited by oil marketers.
He called out oil marketers for deliberately refusing to bring down the cost of diesel and other petroleum products whose landing costs had reduced.
He said, “Deregulation of the downstream petroleum sector was approved on the 19th of March. What was announced on that day was already deregulation, However, PMS and kerosene are strategic to the country.
“Hence, we cannot allow their prices to be determined wholly by marketers. Consumers had to be protected. This is what obtains globally.
“If we allow marketers to fix prices of these commodities anyhow they like, it will not augur well for us. That is why we will continue to intervene in price fixing.
“In the recent price fixing, we allowed the marketers to get some profit, but we determine the price to protect consumers.
“Look at our battle with marketers. We brought down the price of PMS, because the landing cost had come down, but the marketers had refuse to bring down the prices of diesel and other deregulated commodities, even though their landing costs had come down also.”
He noted that if the PPPRA does not continue to interface with marketers in determining the prices of PMS, the oil marketers would fix the prices arbitrarily and exploit consumers.
According to him, PPPRA would continue to work with marketers in determining the prices to ensure that the best pricing is arrived at for the consumers.
He further noted that the government is aware that the price of crude oil would rise again in the near future, which would also affect the pump price of PMS, stating, however, that government was already in the race to provide a cheaper alternative to PMS, in the form of Compressed Natural Gas (CNG).