Major Oil Marketers Group Seeks Gradual Removal of Petrol Subsidy
Petroleum products marketers under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) have advised the government to end the subsidy regime by adopting a gradual removal approach.
The Group In a report by Thisdaylive.com Insisted that petrol subsidy payment was no longer sustainable and was killing marketers’ business.
MOMAN explained that adopting a phased removal approach, which would require adjusting upward, the price of petrol little by little, would ensure that consumers were protected against the attendant shocks.
The Chairman of MOMAN and Managing Director of Ardova Plc, Mr. Olumide Adeosun, relayed the association’s suggestion yesterday, during a virtual capacity building workshop organised by the Federal Competition and Consumer Protection Commission (FCCPC) for oil marketers and journalists.
In the last few months, Nigerians have been grappling with the challenge of getting petrol to fuel their cars, to power their generators, among others, and Abuja, Lagos and other cities have been the most hit in the fuel crisis due to the closure of some filling stations.
While government’s approved pump price is N165, some marketers, who said they could no longer continue to cope with that fixed price have resorted to either hiking the price as high as over N180 or hoarding the product.
Many industry players, economic policy analysts as well as multilateral organisations like the World Bank and the International Monetary Fund (IMF) had advised the government to jettison the subsidy regime and channel the money into other critical sectors.
Against the provision of the Petroleum Industry Act (PIA), which okayed the deregulation of downstream petroleum sector, the federal government had suspended that provision, citing the fear of possible hardship it would bring upon vulnerable Nigerians.
However, the price of petrol just like other commodity prices has been on the rise owing to the cold war between Russia and Ukraine in addition to the oil price rally.
However, presenting MOMAN’s position, Adeosun said gradual removal was the only way to address the subsidy challenge which has compounded the bleeding of the already ailing economy.
He said, “So looking forward, what do we say? We are saying that we need government to work assiduously to gradually phasing out the subsidy by allowing the prices to increase gradually.
“Doing it slowly really means that at no point are we shocking the system to the point of collapse because the farther down the line we kick the can, the deeper and greater the shock will be.
