Experts call for inclusive approach with stakeholders over fuel subsidy removal

“I really think the current approach might create more problems for the economy and country.

News Agency of Nigeria • June 1, 2023

Fuel queue used to illustrate the story

Some oil and gas experts have called on the federal government to ensure a more deliberate, planned and inclusive approach on fuel subsidy removal.

They made the appeal in separate interviews with journalists in Lagos on Thursday.

The Nigeria National Petroleum Company Ltd., (NNPCL) has increased the price of petroleum pump from N184 per liter to between N488 and N557 per litre, depending on the state in which a consumer is residing.

Mr Joe Nwakwue, an oil and gas consultant, who supported the subsidy removal, said he expected it to be part of holistic industry reform.

“I really think the current approach might create more problems for the economy and country.

“A more deliberate, planned and inclusive approach would have been better,” he advised.

Mr Nwakwue, former Chairman, SPE Nigerian Council, said that the pump price increase was not by the Major Oil Marketers Association of Nigeria (MOMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN) because they were essentially retailers.

He said that setting prices at the pump was not within the contemplation of section 205 of the Petroleum Industry Act (PIA).

He urged the government not to only be driven by the need to stop the leak of the treasury, but also focus on the legislative framework as spelt out in the PIA.

“Price fixing is what we are trying to get away from.

“I do not see deregulation. All I see is subsidy removal. We still continue to fix prices.

“We still have a single market supplier.

“Deregulation would mean liberalisation of the sector along the lines specified in the PIA,” he added.

Similarly, Dr Ayodele Oni, partner, Broomfield Law Practice, said that he expected the leadership of IPMAN and MOMAN to engage in serious discussions with the government.

Mr Oni said that the meeting should be with the objective of releasing guidelines to the industry players on how best to approach the situation.

“Members of both associations have benefited from the subsidy scheme and enjoy some preferential treatment in accessing forex for operational purposes which makes them quite cost-efficient.

“However, since the NNPCL has increased its pump price, MOMAN and IPMAN are likely to follow suit.

“Under the current deregulation process, at what price do you think it will be appropriate for current market price?” he queried.

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