Privatization or deregulation of refineries? The ordinary man on the street would answer, “Neither”. A widely canvassed position is rather for the revamp and or privatization of existing refineries and the establishment of new ones- a big black hole the government has been spilling much-needed cash into with repulsive gusto. This creates an opportunity for the private sector to troop to the rescue because the nation must strengthen her refining capacity if she is to survive the gathering drop in the demand for crude petroleum in the international market. Unarguably, establishment of small scale refineries is a viable investment choice because there is already a ready market both within and outside the country for the products. However, private operators may not succeed unless the current operating environment is modified. If the country continues with the subsidy regime, private operators would find it difficult to survive. Investors insist that for private participants to succeed, government must allow a market-driven environment to evolve. It is therefore ironical that while we all admit that we need more refineries to come on stream; we are yet to agree on how they can thrive because regulation is a market killer- 2nd only to PHCN.
Posted on: Thu, 27 Jun 2013 19:45:18 +0000
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