By Oluwagbenga Bankole
Stakeholders in the Nigerian Oil and Gas industry have
applauded the transition committee of All Progressives Congress (APC) and also
charged the President to probe oil marketers. This is a follow up to the
proposal by the transition committee
that subsidy on premium motor spirit (PMS), otherwise known as petrol should be
removed;
Speaking exclusively with TOTALNEWS247, the Managing
Director of Zedex Petroleum, Mr. Charles Nwangwe said the removal of subsidy is
long overdue, adding that it would present an opportunity to re-assess the
state of the country’s refineries.
“The price of crude
oil in the international market has come down considerably. This in effect
means there may be no need for subsidy payment at all. This will also be an
incentive for the incoming government to re-assess the state of our refineries
with a view to starting local refining of petroleum products again,” he argued.
Nwangwe also added
that the new administration needs to examine properly the years that the
subsidy regime started and investigate oil marketers in the country.
The President of the
Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN)
Comrade Francis Olabode Johnson told our correspondent in a telephone chat that
President Buhari should yield to the advice of the APC Transition committee if
the country can increase its local refining capacity.
While speaking with
our correspondent, the Managing Director, Amee Global Services Limited said
that; “the subsidy regime has been so mismanaged that the only option is to
remove it because a situation where very few are feeding fat at the expense of
Nigerians in the guise of marketers is unacceptable and honestly I want the
marketers probed and brought to book.”
He added that; “the industry might feel the
effect but it will eventually benefit everyone if the subsidy is removed. It
might seem like punishment but I will advise we suffer now and enjoy later,
after all we have bought fuel for N200 at some point when there was scarcity.
At this point the removal is non-negotiable.”
The Chairman, Capital
Oil and Gas Mr Ifeanyi Ubah recently urged President Muhammadu Buhari to
immediately remove fuel subsidy.. He also called for a probe of oil marketers
for the recent near-shutdown of Nigeria’s economy.
Ubah while appealing to Nigerians to support the
deregulation, said that removal of subsidy
remained the way to get petroleum products at the lowest price.
He said, “I have
always been of the view that we should deregulate so that we can cut corruption but unfortunately Nigerians didn’t
take it from Jonathan. I urge President Buhari to take a bold step and
deregulate the oil sector. He is not a stranger to the sector having being a
former minister of petroleum. He will be respected for taking the step. There’s
no point paying subsidy when Nigerians are not benefiting from it. The
president will be doing the right thing if he deregulates the sector so that
the product will be sold at cheaper rate in the future.”
The All Progressives Congress (APC) transition committee,
whose report is expected to influence the policy direction of the new
government, also recommended that kerosene subsidy should be scrapped
immediately.
While kerosene is official price N50 per litre, the end
users pay as much as N150 despite the existence of subsidy — a case of double
jeopardy for the government and consumers but a source of massive income for
marketers and fuel import contractors.
The committee also asked Buhari to privatise the nation’s
four refineries by adopting the model of Nigerian Liquefied Natural Gas (NLNG)
as a model.
NLNG is jointly owned by the Nigerian National Petroleum
Corporation (NNPC) 49%, Shell Gas B.V. 25.6%, Total LNG Nigeria Ltd 15% and Eni
International 10.4% — but it is not managed by the Nigerian government, unlike
the nation’s refineries which are solely managed by the NNPC.
These recommendations are intended to “eliminate waste and
redirect resources to fuel development, growth and job creation”, according to
the committee headed by Ahmed Joda, former super perm secretary.
Fuel subsidy, which gulps billions of dollars every year,
has been a very volatile issue in Nigeria’s political economy since the
mid-1980s, leading to riots and demonstrations because of the resultant
increase in pump prices of petroleum products.
But with dwindling oil revenue, ballooning subsidy claims
and growing national debt, there is an emerging consensus that the expenditure
can no longer be sustained.
Attempts by the administration of former President Goodluck
Jonathan to remove the subsidy in 2012 were greeted with nationwide protests
amid allegations of scam in payments to marketers running into trillions of
naira. Jonathan eventually reversed the policy.
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