Major Oil Marketers Association of Nigeria (MOMAN) and other marketers in the downstream sector have implored the Federal Government to put into practice the Petroleum Industry Act (PIA) if it intends to wean Nigerians off cheap petrol and focus on other priority sectors.
They said that ending the subsidy on Premium Motor Spirit (PMS) is very difficult but the Federal Government has no other option in light of the present economic crisis.
MOMAN also requested massive investment by the government in various sectors such as mass transportation, healthcare and education to successfully save Nigerians from petrol subsidy.
Chairman of MOMAN, Olumide Adeosun, made this known at the just concluded Association of Energy Correspondents of Nigeria (NAEC) Strategic International Conference in Lagos.
Adeosun spoke on the topic: “Energy Transition, PIA, Petroleum Pricing and the Way Forward for the Downstream Sector.”
Represented by the Chief Executive Officer, MOMAN, Clement Isong, Adeosun noted that it would remain extremely difficult to keep Nigerians off cheap PMS, also known as petrol.
He said: “It is something that must be done as there are no more viable options.
“We are told that this year the subsidy bill to the Federal Government may be between N5 trillion and N6 trillion. Clearly, Nigeria cannot afford this.
“To wean Nigeria off this subsidy, a lot of investment must be done to sensitize Nigerians in convincing them and finding alternatives.
“We need to begin to remove the subsidy and mitigate the pains Nigerians will feel when petroleum prices begin to manifest their true value.”
Adeosun stated that marketers were optimistic that the industry was moving in the right direction with the enactment of the Petroleum Industry Act (PIA) 2021 which was an excellent piece of legislation.
“We are now at the point of implementation, which is taking a bit longer than hoped but this is not necessarily a bad thing.
“The President postponed the implementation of free market pricing, which has caused a slowdown with respect to benefits expected from free competitive open market pricing, such as new investments and subsidy removal, ” he said
Adeosun disclosed that the marketers were also sure that (the decade of gas declared by the Federal Government in January 2021) was vividly the way forward.
He said, however, the surge in gas prices worldwide and the unavailability of the product had made it a little more challenging in the roll out.
Adeosun said: “The ordinary Nigerian who was meant to transit to gas not just for cooking but also for powering automobiles and power generation is struggling because PMS pricing is yet to be fully deregulated.
“It creates an aberration and additional challenge for the adoption of gas, as most people are still dependent on cheap PMS for their cars and generators.”
According to him, while the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has a vital role to play in guiding our future, the best regulator ultimately is the market.
“The market regulates prices if you are too expensive people would not buy from you. The market regulates quality as well as customer service. The market also rewards the best in class”, he added.
On his part, the Group Managing Director, Rainoil Limited, Dr Gabriel Ogbechie said that the country seeks to save over N12 trillion, which could be distributed to other sectors of development for the country if the downstream sector is fully deregulated.
He also said that the petroleum industry act remains the silver bullet in developing the downstream sector, however, bewailing the huge amount expended on fuel subsidy so far.
Speaking in one of the panel sessions, Ogbechie disclosed that the subject issue of deregulation has come to stay, as a policy guideline for the downstream petroleum sector, given the enormous advantage that comes with a deregulated petroleum environment.