Business - News - Oil & Gas - November 27, 2021

Independent oil marketers back plan to remove petrol subsidy by 2022

MOMAN faults plan to replace subsidy with cash transfer

MEDIATRACNET

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has given its support to the Federal Government’s plan to remove subsidy on Premium Motor Spirit (PMS), also known as petrol by 2022.

IPMAN’s President, Chinedu Okoronkwo, said on Friday in Lagos that the Petroleum Industry Act (PIA) signed into law by President Muhammadu Buhari last August had no provision for subsidy.

On Thursday, the Minister of Finance, Budget and National Planning, Zainab Ahmed, announced in Abuja that the government would remove fuel subsidy and replace it with a monthly N5,000 transport grant to about 40 million poor Nigerians.

”We, as marketers (of petroleum products) have always advised the government to remove petrol subsidy, because it is not in the interest of development of the downstream sector.

“We welcome the decision of the government to stop subsidizing the supply and distribution of petrol by 2022. We are hoping it will attract more investments to the sector, especially with the passage of PIA.

“What we want is that a level playing field be provided for everyone in the sector to encourage competition once the subsidy is removed,” Okoronkwo said.

He, however, advised the government to reinvest the subsidy savings in critical areas such as healthcare, education, agriculture and other sectors that would increase revenue accruing to the country.

Also, immediate-past President, Major Oil Marketers Association of Nigeria (MOMAN), Tunji Oyebanji, said continuing to subsidize the supply and distribution of petrol was not sustainable in the light of current economic realities.

He said the 2022 deadline was realistic and its impact might be mitigated with the coming on stream of some private refineries, including the 650,000BPD Dangote Refinery, Bua Group Refinery, Waltersmith Refinery and other modular refineries.

Oyebanji, who is the Managing Director of 11 Plc, however, faulted the plan to replace the subsidy with cash transfer to Nigerians due to lack of a reliable data base in the country.

“In my personal opinion, I am of the view that such funds should be channeled to areas like education and mass transportation that would be accessible to ordinary Nigerians,” Oyebanji said.

An oil and gas expert, Wilson Opuwei, said the conversation about fuel subsidy in Nigeria should have been a thing of the past because it was an obvious wastage of the nation’s resources.

Opuwei, who is the Chief Executive Officer of Dateline Energy Services Ltd., maintained that the elites were the major beneficiaries of the fuel subsidy regime.

“We should let market forces determine the price of petrol and other products, not government dolling out subsidies with funds that we don’t even have.

“What government should be doing is to create enabling environment for businesses to thrive, and once Nigerians are economically empowered, we will not be having this debate on petrol subsidy.” (NAN)

 

Leave a Reply

Your email address will not be published.

Check Also

New PSC agreements will deepen investment, grow Nigeria’s deepwater output to 10bn barrels

The revised Production Sharing Contracts (PSCs) in the Nigerian oil and gas industry will …