THE major oil marketers, yesterday, urged the Federal Government to consider investing monies utilised in funding petrol subsidy to finance infrastructure, education and health in order to stimulate economic development in Nigeria.
This was even as petrol shortage, characterised by long queues continued in Abuja, Lagos and other parts of the nation, thus impacting negatively on different sectors of the economy, including transportation and manufacturing.
However, the oil marketers, which noted that the nation has been subsidising petrol for a long time, stressed that a time has come for it to reduce such subsidy while investing in basic areas, especially mass transportation and agriculture.
The Chairman, Major Oil Marketers Association of Nigeria, MOMAN, Olumide Adeosun, disclosed this at the Consumer Protection Regulatory Framework Workshop,organised by the Federal Competition and Consumer Protection Commission, FCCPC/MOMAN, yesterday.
He explained that, “MOMAN appreciates the challenges the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA and the Nigerian National Petroleum Company Limited, NNPC face in making the product available despite the restrictive supply environment, extremely high international products costs and the almost insurmountable international logistics challenges occasioned by the unavailability of diesel and its ubiquitous place in the supply chain.”
Mr. Adeosun informed the gathering that, “there is an energy crisis impacting the world, developed and developing countries alike, similar to the COVID-19 pandemic. Countries have different approaches of dealing with the problem”.
Specifically, he said: “There is some energy nationalism going on, leading to some major refining countries hoarding petroleum products like diesel for local use as was the case with COVID-19 vaccines.
“Some developing countries are subsidizing the cost, leading to widespread outages in those countries. Most countries are allowing the price to adjust, leading to higher prices but with product availability. MOMAN believes the answer is somewhere in between.
“Having subsidized PMS for so long, Nigerian institutions now have a diminished capacity to deal with the current international energy crisis. If the country had spent monies spent on subsidies on education, health and infrastructure, Nigerians and Nigerian businesses would have been better equipped to face today’s energy challenges.
“Better late than never. MOMAN believes that Nigeria needs to gradually reduce the subsidy of PMS while investing and perhaps subsidizing mass transportation and productive activities in such areas such as agriculture.”
He added: “Everyone has a role to play. We must all reduce consumption and find other ways to weather the current energy crisis as no Government can make this painless. Predictably, as a country, we shall be faced by the choice of queues and unavailability of products or increases in price at the right pace to make product available.”
As exclusively reported by Vanguard, the amount of money spent by the Federal Government on petrol subsidy in the past seven years hit N4.838 trillion in May 2022, latest data have shown.
This constitutes just 24.2 percent less than the N6.390 trillion, which the Federal Government borrowed to enable it fund the N17.1 trillion 2022 budget. In other words, the N4.838 trillion could have been utilised to reduce the nation’s huge deficit.
Checks by Vanguard on data reported by the Nigerian National Petroleum Company, NNPC, Limited and the Nigerian Extractive Industries Transparency Initiative, NEITI, showed that from the N316.70 billion spent in 2015 to N1.274 billion spent in the five months of 2022, the country has continued to pay a high cost for the product.
In any case, a visit to some depots in Lagos showed that there were commercial stocks of the products, but operators said distribution was hindered by the long holiday.
It also showed that a few major marketers which had the product, sold at the N165 per litre regulated price, while those without it simply shut their gates against motorists and other buyers.
On the other hand, many independent marketers, who did not have petrol shut their stations while a few that had the product sold at higher prices, ranging from N200 to N300 per litre, depending on location.
Commenting on the development, the National Operation Controller, Independent Petroleum Marketers Association of Nigeria, IPMAN, Mr Mike Osatuyi, had said: “We can confirm that there is adequate petrol. But distribution has been a major challenge as tanker drivers travel for the holiday. We are optimistic that there would be improved once the holiday is over.”
