Fuel Price: Nigerian To Buy N800/litre If Subsidies Are Removed – Oil Marketers

In the push for a total deregulation of the downstream oil sector gets stronger, Nigerians have been forewarned that they might likely pay as high as N800/litre if subsidies are removed from the fuel.

Oil marketers made this prediction even as the fuel scarcity bites harder and lingers longer than expected, mNaija reports.

The federal government through the Minister of Finance, Budget and National Planning, Zainab Ahmed, recently revealed that it would gradually withdraw subsidy on petrol, as budgetary allocation for subsidy would end in June.

The pronouncement follows several calls for fuel subsidies to be removed in other to attract more investments to the downstream oil sector in the country.

Industry experts have continually push for this course with the argument that the high cost of subsidy on petrol was a burden on the Nigerian National Petroleum Company Limited (NNPCL) and that it’s the rich and not the average that benefit from the exercise.

The subsidy regime has brought burdens upon the NNPCL as the sole importer of petrol into Nigeria, and this has lingered the crisis of price and other factors in the downstream oil sector.

However, reacting to the push, oil markers have called on the federal government to ensure a friendly subsidy removal regime.

The Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN) Abuja-Suleja, Mohammed Shuaibu told Punch while it could be advisable to remove subsidy, Nigerians should know that the cost of petrol could cross N800/litre once the commodity was no longer subsidised.

According to him, the federal government should ensure that all the necessary measures and infrastructure to ensure a less stressful subsidy removal regime were put in place before implementing the decision.

Shuaibu advanced that “If the government fails to take the appropriate measures, and they say they want to remove fuel subsidy, the situation will be worse than this, the masses will suffer. How can you remove the subsidy if you don’t have this product (petrol)?

“If the government removes subsidy, where is the product? If you are removing the subsidy, maybe by that time, the way diesel is sold at between N800 – N900/litre, we could be buying petrol at N800/litre, if not more than that.

“This is because the product will be scarce, even from the government cycle. So the government should tell Nigerians the truth about this fuel supply crisis. It is not a problem caused by marketers.”

The IPMAN official submitted that the downstream sector was not structured for adequate competition, adding that this could also pose challenges when the subsidy was eventually removed.

He further explained that oil marketers were ready to sell, and when marketers got products a few weeks ago, the queues disappeared.

Shuaibu pointed out that “But as it is today, you have black marketers everywhere selling with jerrycans and you will ask, where are the security agencies and the regulators?

“By tomorrow they will claim that it is the fault of the marketers. How? We are businessmen and every businessman wants to make a profit. You know the law of supply and demand. When the product is scarce, prices will rise, and vice versa.

“By the time you are removing subsidy, you should know that the market is not properly opened and there is no competition. They always tell you about Dangote Refinery. We must understand that Dangote is a privately owned company.

“The pipelines of that facility were not even designed to run in any Nigerian state, rather it was designed to run to neighbouring countries, and maybe that one in Lekki there, that is all.

“So, more or less, that refinery might still exploit us, because when there is no competition, the only supplier calls the shots. For had it been that as Dangote is producing in Lagos, another person is producing in Warri, while one refinery is pumping in Abuja, then there will be competition.

“We can see, for instance, the competition in the telecommunications sector today. But the government will continue to deceive us that Dangote Refinery will come on stream when we know that it cannot really solve the problem.

“They should not continue to be singing it as if it is what will solve our fuel supply problems.”

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