Omar Farouk lauds achievements of SAIPEC, Oil & Gas conferences
Farouk told Realnews in an exclusive interview in Lagos that the SAIPEC and other conferences bring up perspectives that policymakers often do not seem to see on their own.
“So to that extent it is a good place for the exchange of thoughts which hopefully will influence public policy,” he said.
He, however, quarried the approach used towards addressing some of the challenges faced in the industry and wondered for example, the need for several oil and gas conferences in Africa and Nigeria when they can all be collapsed into one for greater effectiveness and efficiency.
“As I have said severally, I don’t think we need to be holding so many conferences. The same people you invite as delegates, exhibitors and speakers are the same that next two weeks will go to Abuja, go to Port Harcourt etc. the resources are just not there. So why don’t these guys come together and do something truly big. Even if they do it once for a whole week like they do in OTC. But the way these guys do these things, it is more like a business. Everybody wants to own his territory and then, make the profit.
Farouk also quarried the approach used by the Nigerian Government in its efforts to solve the subsidy controversies by completely removing the subsidy.
According to him, the government should have first addressed corruption issues around the subsidy first, before its decision to stop the payment.
That way the government would be able to know the actual volume of petrol or whatever that the country is consuming.
He said that removing the subsidy the way they did was “Like throwing the baby away with the bath water, that’s the way I see it. But it is back anyway, subsidy, whether you like it or not will come back because government didn’t say it is floating. If they have said it is floating, fine. Then it is immaterial. If it goes up people will pay more and if it goes down, people will pay less. But government fixed the price and that price they don’t have control over. They don’t control the international oil price, what they control is Nigerian oil price and since the Nigerian oil price is tied to the international, there is nothing they can do.
“If the government would have the refineries working, they can decide that this petrol must be sold at the price, so it is controlled. But again, there will still be corruption because it is going to be cheaper in Nigeria but just across the border you will find it two or three more times.
He explained that it is difficult not to subsidize especially as the price of oil keeps going up because global oil price has been going up.
“The point is, we produce crude, but we don’t process it. We import it. One, we have no control over our foreign exchange, two, we have no control over the international price of oil, we have little or no control over shipping and insurance. So, we are at the mercy of all of these variables.
“The fact is that there was no way government would have been able to continue to pay the subsidy. Let’s face it. If you say you want to continue, then the more the economy would collapse. You took an action that people feel the pain, and now you are reassuring them that there won’t be an additional increase. Now if there won’t be an additional increase, it means you are going to subsidize.
“The point is, we have to make a decision. What is energy to our people and our economy, is it true that we are too poor to buy energy? If it is so, then go and sell it to those who have the money to buy it and that is what we have been doing.
“On the other hand, if we believe that it is not just selling energy at cheap price or subsidized price, but the effect of doing that. If everybody has access to a lot of energy in the rural area, I guarantee you that a lot of petty cottage industry will spring up. Everybody will be doing very well; poverty will be reduced to the barest minimum. When these people have been brought into the national economy; the government can then make a lot of money from that same oil.
“Go to Europe, the place that most Nigerians go for lace materials is Austria or Switzerland and there is not a single factory in Switzerland or Austria for laces. Over 90% of the laces that we buy from Dubai, they buy them from the basements of the homes of various people. Small cottage industries. Of course they have machine, but it’s a family business of five, ten people. But they do this because they have energy,’’ he added.