The Federal Government has spent about N10n subsidising petroleum products in the last 15 years, the Major Oil Marketers Association of Nigeria has said.
MOMAN and other stakeholders, including the Depot and Petroleum Products Marketers Association of Nigeria and the Petroleum Products Retail Outlets Owners Association of Nigeria, said there was a need for full deregulation in the petroleum downstream sector.
They stated this on Thursday during the Nigeria Petroleum Downstream Consultative Summit, which was held online.
The Chairman, MOMAN, Mr Adetunji Oyebanji, described the downstream sector as pivotal and fundamental to the health of the nation’s economy.
Oyebanji is the managing director/chief executive officer of 11Plc (formerly Mobil Oil Nigeria Plc).
He said, “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.
“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.”
According to him, there are adequate structures that can be put in place to ensure that the consumers are not cheated when market forces are allowed to determine prices.
Oyebanji said, “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 subsidise fuel.
“Over the last maybe 15 years, we have spent close to N10tn subsidising 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.”
The Managing Partner, Teno Energy Resources Limited, Dr Timothy Okon, said the government should redirect the money being spent on fuel subsidy to education and health sectors.
Okon, a former top executive at the Nigerian National Petroleum Corporation, said, “Between 2006 and 2018, Nigeria expended $63bn on subsidies.
“This is an enormous amount of resource for a country that needs to educate its young people, to build health centres, 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.”
He added, “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.”
The Chairman, DAPPMAN and MD/CEO, Northwest Petroleum and Gas Company Limited, Mrs Winifred Akpani, said deregulation would create a win-win situation for the consumers, government and industry operators.