The Major Oil Marketers Association of Nigeria, MOMAN has disclosed that if the petroleum downstream sector is to play its pivotal and fundamental role in the resuscitation of the nation’s economy, there is a need for full deregulation of the sector.
MOMAN and other stakeholders, including the Depot and Petroleum Products Marketers Association of Nigeria and the Petroleum Products Retail Outlets Owners Association of Nigeria made this call during the Nigeria Petroleum Downstream Consultative Summit, which held virtually.
“We believe that full and total deregulation with appropriate standards and regulation in terms of consumer protection is the way to go. We believe that we need to work with the government to achieve this at the soonest possible time. It is an industry that requires significant investment to improve service delivery and to generate employment, to help expand and grow the economy, especially at this very trying time.” said Mr. Adetunji Oyebanji, the Chairman, MOMAN.
Oyebanji who is the Managing Director/Chief Executive Officer of 11Plc (formerly Mobil Oil Nigeria Plc) also disclosed that the country has expended a whopping sum of N10tr in the last fifteen years on subsidy.
“We are all interested in the future of the country as stakeholders. But we need to make the right policy decisions at the appropriate time. Nigeria cannot, as we know, continue to subsidize fuel.
Over the last maybe 15 years, we have spent close to N10tn subsidizing fuel. This is just unsustainable in this environment, and I think posterity will not judge us properly if we don’t take the right decisions; so we will continue to engage government,” he added.
On his part, the Managing Partner, Teno Energy Resources Limited, Dr. Timothy Okon said the best way to go is for the government to redirect the money being spent on fuel subsidy to education and health sectors.
Okon, a former top executive at the Nigerian National Petroleum Corporation, NNPC disclosed that between 2006 and 2018, Nigeria spent $63bn on subsidies.
“This is an enormous amount of resource for a country that needs to educate its young people, to build health centers, to create the basis for this economy, and to create employment opportunities.
“The key thing really is to have the political will to ease out of this current situation, and the ideal time is now when clearly oil prices are low.
“Things like education and health are quite fundamental if you want to redirect subsidies; those are the areas in which you build a more egalitarian society in the future.
“The energy footprint of wealthy people is far greater than the energy footprint of the poor. So, subsidy is disproportionately skewed towards the wealthy,” he added.
Recall that the issue of subsidy which is Nigeria’s government intervention to lower the cost of fuel for the end consumers has been a hot topic of discourse in the country.
In introducing the subsidy regime, it was government’s belief that Nigerians would have to pay more for fuel if subsidy is removed. A previous attempt by the Federal Government in 2012 to remove subsidy resulted in a socio-political protest.
Also, international financial institutions like the World Bank and the International Monetary Fund have been urging governments to cut costly national subsidies and to provide them in a targeted fashion to poor communities. The World Bank posited that subsidies “impose a heavy fiscal burden and are likely not sustainable”.