Lagos Chamber of Commerce urges private-sector involvement for refined products

The Lagos Chamber of Commerce and Industry advocates that the private sector be allowed to supply domestic refined products, and the chamber also advocates the eventual privatization of the state-run Nigerian National Petroleum Corporation (NNPC), OPEC News Agency reported.

April 22, 2003

2 min read

By OGJ editors

HOUSTON, April 22 -- The Lagos Chamber of Commerce and Industry advocates that the private sector be allowed to supply domestic refined products, and the chamber also advocates the eventual privatization of the state-run Nigerian National Petroleum Corporation (NNPC), OPEC News Agency reported.

During a news conference in Lagos earlier this month, Chamber Pres. Chief John Odeyemi suggested that the government license private-sector operators to refine petroleum products and also to import products for resale.

"Under this arrangement, there will be no price fixing, apart from the price moderation by the Independent Regulatory Authority to prevent the exploitation of consumers by a private oligopoly," Odeyemi said. "The import of petroleum products should be left entirely to licensed importers."

The chamber also advocated a transitional regime of dual pricing, saying "the NNPC could continue to fix its prices as it deems fit, while the private providers should be allowed to sell at prices dictated by their cost parameters."

In the medium to long term, the NNPC should be privatized, Odeyemi said, adding that petroleum production, marketing, and distribution, "is profitable enough to attract sufficient private capital."

The chamber described the NNPC's exclusive responsibility of supplying petroleum products for Nigeria as "impracticable." It also emphasized the need for policy stability, saying unstable or unpredictable polices discourage investors.