By Ikenna Omeje
The Petroleum Technology Association of Nigeria (PETAN) and the Depot and Petroleum Products Marketers Association (DAPPMA), have declared support for the removal of fuel subsidy in Nigeria.
The President of PETAN, Mr. Bank-Anthony Okoroafor and the Executive Secretary of DAPPMA, Mr. Olufemi Adewole, both stated this in a separate chat with our correspondent while reacting to the statement of the new Group Managing Director (GMD) of the Nigeria National Petroleum Corporation (NNPC), Mele Kyari, that it has become difficult to make premium motor spirit (PMS), popularly known as petrol, available at N145 per litre.
In recent times, there have been calls from different quarters seeking the Federal Government discontinuation of fuel subsidy.
The most recent call came last week Wednesday, when the Nigerian Governors’ Forum (NGF), through its Chairman, Dr. Kayode Fayemi and Governor of Ekiti State, described fuel subsidy as unsustainable payment to marketers and called on the Federal Government to do away with it, because according to the Forum, it is a drain on the nation’s resources.
Fayemi made the demand when he led a delegation to pay a courtesy visit to NNPC GMD, Kyari in Abuja.
He said that subsidy remains a major drawback on government revenues, adding that there is need to consider a new deal on how government will absorb its cost.
“It is important to highlight that subsidy remains a major drawback on government revenues. We may need to consider a new deal on how governments will absorb the cost of subsidy,” he said.
“This has become necessary given the new reality of low oil revenues and rising government commitments. We believe that at the current course, subsidy costs will continue to offset any recovery in the oil market. The country recorded one of its lowest cost of subsidy in 2016 when oil traded at an average of US$48.11 pb. Total subsidy that year was around N28.6 billion; but the amount rose to N219 billion in 2017 and N345.5 billion by mid-2018, as the price of oil and domestic PMS consumption rebounded. These are important considerations for us, with direct implications on energy security and economic stability in the country,” he said.
Kyari had on Wednesday last week, while speaking during a courtesy visit to the Senate President, Ahmed Lawan, at the National Assembly Complex in Abuja said, “The N145 per litre fuel price regime in Nigeria runs against the N350 per litre most of the other West African countries operate, encouraging smuggling,” adding that “It is even very difficult for us to make the product available at N145.”
The PETAN President while responding to a question on whether this is the right time for the country to scrap fuel subsidy, told Nigerian NewsDirect that the people who this Subsidy is meant for, are not getting the benefits and suggested that the money the country spends on subsidy should be channelled towards building new refineries, creating employments and making Nigeria a net exporter of petroleum products.
Okoroafor said, “ The benefits are not reaching the desired beneficiaries. The amount spent on subsidies will build new refineries, create employments and make Nigeria a net exporter of petroleum products.”
Similarly, the Executive Secretary of DAPPMA, Adewole Said that the right time to remove fuel subsidy is now, noting that the country cannot afford it.
“The very right time to have removed fuel subsidy was long ago when Goodluck Jonathan decided to do it. The second right time to remove it is now, because the country cannot afford it. Petroleum marketers are clamouring for the removal of fuel subsidy because the country cannot continue to subsidize petrol for itself or more importantly, because we have not been able to determine the quantity we are consuming within the country.
“So, for the fact that countries around us are selling far higher than what we are selling, it gives room to the suspicion that what we actually bring into the country finds its way outside the country,” he said.
Adewole noted that for the fact that in some of the neigbouring countries, a litre of petrol sells for as much as N400, it’s enough motivation for anybody to smuggle petrol outside the country by bribing his way after buying from the depot.
He added that the best thing for the country is to channel the money use in subsiding petrol to other sectors of the economy.
Meanwhile, NNPC on Thursday, denied any plan to hike the price of petrol and advised motorists and other petroleum products consumers to disregard the rumour of a planned increase in the pump price.
In a statement by the Corporation Group General Manager, Group Public Affairs Division, Mr. Ndu Ughammadu, he explained that the statement of the corporation’s GMD, Kyari, at the National Assembly on Wednesday did not suggest any plan to increase the price of the white product.
Fuel subsidy is the money paid by the Federal Government of Nigeria to reduce the cost of refining petroleum products, especially fuel. The Federal Government has for sometime now been selling the idea of fuel subsidy removal to Nigerians; making them to understand how immensely beneficial the removal will be to all.