Oil, gas stakeholders laud removal of fuel subsidy
Some stakeholders in the oil and gas industry have commended President Bola Tinubu’s pronouncement on the removal of fuel subsidy.
They made the commendations in separate interviews in Lagos on Monday after Mr Tinubu’s inaugural speech as Nigeria’s president.
Mike Osatuyi, the national operations controller, Independent Petroleum Marketers Association of Nigeria (IPMAN), said the removal was a welcome development geared toward revamping the downstream sector of the oil and gas industry.
Mr Osatuyi said the removal would bring about competition among players and address the monopoly issue.
He said the subsidy removal would lead to market liberalisation, availability of products and check excesses of middlemen.
Mr Osatuyi, however, said there would be an increase in the price of petroleum but added that there would be competition.
Tunji Oyebanji, managing director, 11 Plc, said the pronouncement was a timely decision for the country.
However, Mr Oyebanji said it was not clear if the removal of the fuel subsidy was with immediate effect.
“Scarce resources will be channelled to productive sectors of the economy.
“Borrowing levels will reduce significantly. It may possibly lead to the strengthening of the naira,” he said.
Obafemi Olawore, former executive secretary of the Major Oil Marketers Association of Nigeria (MOMAN), who supported the subsidy removal, said there was a need for the nation to move toward full deregulation.
“However, as a new administration, it must be done in phases, over six to 12 months, to give room for consultation and engagement to make it bearable and less painful,” Mr Olawore said.
Joe Nwakwue, an oil and gas consultant and a former chairman, SPE Nigerian Council, said Mr Tinubu was right when he stated that petroleum subsidies are no longer sustainable.
Mr Nwakwue said that considering the pain and social implications of the removal, it would be irresponsible for any government to yank it off without a plan.
“A multi-month plan that addresses key fuel market issues/challenges and measures to alleviate the pain must be crafted, adopted and rolled out.
“A knee-jerk removal would be painful to the consuming public and potentially catastrophic to the economy,” he said.
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