JUST IN; FG Finally Speaks On Date For Subsidy Removal –

JUST IN; FG Finally Speaks On Date For Subsidy Removal

JUST IN; FG Finally Speaks On Date For Subsidy Removal

Strong indications have emerged that the clamour for removal of fuel subsidy will not see the light on day in the current administration, as the federal government yesterday confirmed that no date has been fixed for the removal of the price cap on petrol.
Permanent secretary, Ministry of Petroleum Resources, Gabriel Taminu Aduda, who revealed this yesterday at the closing of the Nigerian International Energy Summit (NIES) said that though the federal government is committed to subsidy removal, “ but we can’t be too specific until every indices has been considered to ensure that the effect it is not too hard on the average Nigerian.’

According to him, “subsidy removal is one that has been with us for a long time, and I want to tell you that my Minister is taking it very seriously and all of us in the industry.

“Because we totally understand the importance of removal of subsidy, but we also understand the greater impact on citizens in the scheme of things, and as we speak, we are still taking a very, very close look at how best to achieve subsidy without disrupting the entire ecosystem of livelihood in Nigeria, because that is our responsibility as government, we have to ensure that the buffers are in place.

“We have to ensure that the forex is made available for those that will do imports going forward from there, we have to ensure that there is some form of incentives in where there needs to be. There is quite a lot we need to put in place and we also have to ensure that supply (of petrol) are available for a minimum of six months ahead, to ensure that if we can finally do that, that the disruptions will be minimal. So we’re looking at all of that.

“And there are quite a number of factors that we need to look at. But, yes, government is committed to removal, but we can’t be too specific until every indices has been considered to ensure that the effect it is is. I mean, it’s not too hard on the average Nigeria,’ Aduda said.

Meanwhile, fuel marketers have urged the federal government to provide a clearly outlined roadmap for the removal of subsidy, make provision for forex for import, and to provide a level playing field for all operators by breaking supply monopoly of the Nigerian National Petroleum Company Limited.

Managing director/CE, 11 Plc, Tunji Oyebanji, in a panel session at the NIES yesterday, a primary role of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is about, actually building businesses. encouraging investments, rather than discouraging or taking steps that may inadvertently lead to discouraging investors.

“Another area that needs to always be looked at constantly is, we need to provide a level playing field. We have a unique situation in Nigeria where the national oil company is the dominant player in the industry. And if that is not managed properly, could find that other players are gradually edged out of the market. And we, as the operators, will look towards the authority to be the one to present or help ensure that is a level playing field for all players. This is critical and very, very important.

Oyebanji also said, “We’ve been talking a lot about, deregulation, removal of the subsidy and things like that. I, for one have been clamoring that we need to have a roadmap in place on how this is to happen. And there are many options. People have spoken about, you know, you do it. Effective June 1, You just wake up and say, well. There’s no more subsidy, or that date could also be the beginning of a gradual withdrawal of the subsidy, whichever way you want to go about it there are pros and cons. And therefore, you have to have a plan. We all know what happened with the issue of currency change recently. We don’t want to have that kind of confusion in our industry.

“So we are saying that there needs to be a very clear roadmap for how this thing is going to be done so that all stakeholders are carried along and we can do it without, you know, any confusion being created the industry, for me.

“This is a very, very critical point that I think people are just talking about the removal of the subsidy. How will it happen, At what rate. What role will various actors play, And I’ll give only one quick example. In the interest of time. If at the end of the, at the point where we are going to remove subsidy and other players are going to be involved in the importation of fuel, for instance, you can’t quit until that bits before looking for a mechanism to provide Forex for them to be able to be involved in importation, you have to do that way ahead of the date that that subsidy removal is going to take place so that they can place order for fuel.

“On the other hand, if you are going to say NNPC should remain as a sole importer, then of course, then you don’t need to change anything and, you know, start with four events. But the reason why I just bring up this point is just to underline the fact that whichever way we want to go about it, it’s important to have a plan. It’s important to have a roadmap so that you will not have any confusion,” he said.

Also speaking, chief executive officer, Ardova Plc and chairman Major Oil Marketers Association of Nigeria (MOMAN) Olumide Adeosun, Nigeria can the said to be operating a deregulated market is one entity controls the importation and supply of petrol in the country.

“You might be forgiven to think that there is full deregulation in downstream, because we were all speaking as if that’s done. But we know for a fact that actually that’s not the case.

“The reality of the matter is that the most fundamental aspect of the, the PIA have not been implemented.. And specifically it’s around the creation of a free market where pricing is determined by the forces of supply and demand rather than by law.

“Deregulation must happen in full, and must happen fast. We can no longer have a situation where there is a single supplier. The country is far too big for that.

The second thing we must do is that, as we are deregulating, we must make sure that we have excellence in execution. That means that we must make sure that, as we manage this big transition, this big change it, it must be done with all the lights on. With our eyes wide open. And it must be done in, you know, with that sustainable. The last piece is that we must do this in full transparency. That means the public must be involved. Everybody, that is a stakeholder, which is everybody.

Adeosun stressed that the reason why the regulation must happen fast is to reduce smuggling. “Smuggling to in the downstream is the equivalent of pipeline vandalism of the upstream. It will help us increase investments in the downstream, he said.