Oil marketers have warned the federal government against reintroducing petrol subsidy, saying it would have a negative impact on the economy.
POLITICS NIGERIA reports that the marketers made the call at the Nigeria Association of Energy Correspondents (NAEC) International Strategic Conference 2023, held in Lagos.
The marketers said that allowing other participants to import petrol would bring about needed competition.
Recall that President Bola Tinubu announced the end of the petrol subsidy regime on May 29, 2023, and the pump price of petrol quickly increased to N617 per litre in the federal capital territory (FCT) in July.
Clement Isong, chief executive officer (CEO) and chairman of the Major Oil Marketers Association of Nigeria (MOMAN), said the previous subsidy arrangement had a negative impact on the economy and that there is still “subsidy in some areas”.
“We must not go back to it,” he said.
He added, “So, essentially, where are we today? Is the market fully deregulated? The short answer is yes,” he said.
“Are we at the price we need to be to recover the cost at the pump? Not everywhere, perhaps.
“The increase in diesel cost in the deregulated market to a N1,000 per litre, the marketers are not happy because they need to push up their pricing in order to recover their costs.
“In some places, there’s full cost recovery, but not in all markets. Is there still subsidy? We keep asking that question. I will say yes, in some areas, there is. Is there an opportunity to optimise, to become more efficient, to reduce the cost? Yes, for individuals and also for the operators or the marketers.”
Isong said the high price of petrol should “force all of us” — consumers — to be more efficient, and the operators to look for innovative ways of pushing down their prices to be competitive in the market.
“I want you to just imagine if prices had stayed where they were before, N185 and world prices are where they are right (now), this country would have died. So the subsidy is much less than it used to be,” he said.
Bolaji Osunsanya, CEO of Axxela, represented by Fisayo Duduyemi, the company’s chief strategy, said like every other commodity, petroleum products should be “allowed to free float”.
“So, even though there may be some fluctuations, it is a better situation to have, because that will then bring some investors into the game to look at those opportunities for them to invest,” he said.
Tunji Oyebanji, managing director of 11 PLC, said the downstream industry must address its current limitations.
“First and foremost, we need to get ourselves out of the bottleneck we have created for ourselves, in which NNPC is the sole importer of fuel in Nigeria,” he said.
“That monopoly needs to be broken down and dismantled completely and when I say that I didn’t say NNPC, I said the monopoly of the single supply into the country is not good because it is inefficient, and it’s not sustainable.”