Chris Igwe is the managing director of Mainland Oil and Gas, a subsidiary of Chrisnak Group, he spoke with journalists at the just concluded Offshore Technology Conference in Houston Texas on the importance of deregulation and removal of fuel subsidy to the Nigeria economy. ROSELINE OKERE was there. Excerpts.

WHAT is your position on the deregulation of the downstream petroleum industry?

Yes, as a patriotic Nigerian citizen, I’m a supporter of deregulation of the industry in line with the national aspiration to grow capacity in that sector of the industry. It takes patriotism to support the policy because our national interest supersedes personal and sectional interests.

Nigeria is our country and the future of the country depends on the actions we take today. So, what we do today determines what we get tomorrow.  So, I would want a situation where Nigeria would be developed like Houston, Texas. So, from all indications the subsidy resources have not been managed well. In a situation where a nation would use 35 per cent of its yearly budget to subsidise fuel consumption is not fair. And at the end of the day, who are enjoying this subsidy? It is the middle class. The common man does not have a car. So, I am of the view as a Nigerian that subsidy should be removed so that there would be level playing ground for all operators to compete. And then at the end of the day, the best would come out of the downstream petroleum industry.

You mentioned the PIB as a prime enabler. What is your position on the proposals in the bill?

It a welcome development. The industry bill is all about transparency in the systems and processes that drive activities of the industry. It deals with such desirable components like accountability and deregulation of the sector which implies subsidy removal. For God sake, this subsidy is not sustainable. We all know that. Because the subsidy is not sustainable, we welcome the PIB, which will provide level the playing ground for all players in the industry.

The only thing is that a lot of operators may not be able to compete when the PIB comes into implementation. But for us, we are strategizing to take

advantage of the new law. That is why we are expanding and want to build more points of sale so that we will be able to compete favourably.

Is there not any aspect of the PIB that you feel should be modified in the interest of investors in the downstream?

I have read the draft bill and I find it acceptable. But the only problem we have about policies and laws in the country is the implementation. I believe that when the PIB is passed into law, it should be implemented efficiently. Having said that, the proposals in the bill are ok and it is welcome.

Given the challenges in pushing products to the rural areas, how have been able to break even in marketing products in such remote locations?

In our group, we have a strong logistics arm. And because we are also in Logistics business it has been easy for us to optimize internal synergy in bulk transshipment of products. We have a robust fleet of haulage trucks which we readily deploy in products bridging. We also have our tank farm, which happens to be one of the biggest storage facilities in Calabar, Cross River State. With our wheeling and storage capacity we are licensed by the Department of Petroleum Resources to get products allocation from Nigerian National Petroleum Corporation (NNPC) for direct distribution in the market.

We also import directly to meet demand on our facilities in addition to holding strategic reserves to ensure that that all our storage facilities are wet with products to continuously and promptly respond to fuel demand from individuals and businesses.

Given the level of your participation in the domestic fuel market, what is your view of the fuel subsidy controversy that rocked the market in recent times?

The subsidy probe is a step in the right direction but there appears to be little will to drive the implementation of the probe recommendations. The spirit with the probe was pursued appears to be going down. From where we are sitting, it is obvious that Nigerians want to see the outcome of the probes so that it would serve as deterrent to those who come to the market to reap from where they did not sow.  People should know that there is law in the land and al operators in the business must operate within the ambits of the laws that govern the state.

Having said that, I believe that the Economic and Financial Crimes Commission (EFCC) and other anti-corruption agencies in the state are diligent enough to drive the probes to conclusion. So, we await the conclusion of the processes to determine outcome of the probes. So due process is the word since, as we all know, the law presumes an accused person innocent until it is proved otherwise.

Is the Chrisnak Group also prospecting upstream integration?

In oil and gas we are in the downstream presently. The industry itself is very big, even in the downstream; Mainland Oil is still expanding its participation in the downstream. We just finished building our storage facility which is about the single largest in Calabar with capacity for 70,000 tons of products. Presently we are doing a holding bay; we are doing a cargo line; and in order to take advantage of the impending subsidy removal, our next plan is to spread our retail sites by building mega-stations across state capitals and major commercial centers of the country.

We want to make Mainland a national company, so the next strategy is to build more gas stations in all the strategic cities of the country. We will go upstream of course but we want to consolidate our presence in the downstream first.

May we know the value your group is adding to the Nigerian labour market?

The Chrisnak group recognizes the need to optimize the use the abundant labour force in the country and we engage staff strategically to ensure that everybody fits into a functional role in our operations. As we speak the group is about 3000 workers strong and our growth strategies provide more career opportunities for non-skilled, skilled, specialized and professional employees.

How do you source funding to drive all the plans you outlined?

We source our funds locally and it is quite challenging. The Central bank Governor should come to our aid because our interest rate in Nigeria is about the highest in the world. In US,  interest rate is about four per cent. How do we compete with foreign companies that get funding at four percent interest rate while we in Nigeria get funds at over 20 percent? That is a major challenge. So, I want to use this opportunity to appeal to the Central Bank Governor to set up a special intervention fund for the downstream oil and gas industry. This has become important to bail out some operators that have made the mistake of taking short term loans for long term investments. That is why some off them are not finding their feet. But in Mainland,  we have a good structure peopled by professionals. But then funding at current interest rate has remained a major challenge.