Economic experts on Sunday advised President Muhammadu Buhari’s regime to ensure that the local refineries are working optimally for effective implementation of the proposed fuel subsidy removal.

The experts gave the advice in separate interviews while speaking on the proposed subsidy removal.

The regime, in order to comply with the provisions of the Petroleum Industry Act (PIA) had announced working through a process for the removal of petroleum subsidy from July, 2022.

An oil and gas expert, Olanrewaju Aladeitan said that the impact of the subsidy removal would be minimised if both the brown and green refineries were up and running.

“Removal of petroleum subsidy which is a consumption subsidy if done in a truly liberalised economy is a welcome development.

“But with deregulation of the petroleum downstream sector, pricing will be determined by the forces of demand and supply.

“The implication of this for Nigeria’s fragile economy with a largely unplanned transportation network is more hardship for the citizens,” he explained. 

“Past experience has shown that once there is an increase in the prices of petroleum products, prices of other goods and services soar and the country plunges into unprecedented hyper-inflation,’’ Mr Aladeitan said.

In his submission, another oil and gas expert, Charles Majomi, said Nigeria had been addicted to fuel subsidy, especially, when crude oil prices were high-eating into the windfalls that should had been directed at national development.

Mr Majomi noted that it was not the first attempt the Federal Government had attempted to wean itself from the stranglehold of this addiction.

“As ensnared in corruption as it was, it did provide a rare example of benefit to the people. Nonetheless, its removal is a bitter pill we have to swallow,’’ he said.

Also, Chijioke Ekechukwu, an economist, maintained that while planning to remove petroleum subsidies, the government should ensure that local refineries are working optimally.

Mr Ekechukwu said that it would enable the country not to depend on the volatility of the international oil price.

According to him, from an economic standpoint, subsidies should not have existed at all.

“Granted that lack of subsidy would have brought more hardship to Nigerian citizens and probably led to high cost of living, but that would have made us quicken the solutions and remedies of such high costs,’’ he noted. 

(NAN)