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Earnings: Oil marketers urge Nigerian Government to remove petrol subsidy

*Leadership of the National Operations Controller notes President Muhammadu Buhari, in his 2022 Federal Budget proposal, has identified the problem and the solution is to remove the subsidy

Alexander Davis | ConsumerConnect

As a strategy to increase the contribution of the downstream of the economy to the country’s revenue, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has advised the Federal Government to remove subsidy on petrol products.

Mr. Mike Osatuyi, National Operations Controller of IPMAN gave the advice in an interview with the News Agency of Nigeria Thursday, October 7, 2021, in Lagos.

Osatuyi was said to have reacted to President Muhammadu Buhari’s presentation of the 2022 Federal Budget proposal to the National Assembly (NASS), in Abuja, FCT.

President Muhammadu Buhari (left) in a tête-à-tête with the leadership of the National Assembly in Abuja, FCT

While presenting the N16.39trillion ‘Budget of Economic Growth and Sustainability’, President Buhari had noted the poor performance of oil revenue in the current 2021 Budget.

Buhari attributed the development to a shortfall in production, as well as significant cost recovery by the Nigerian National Petroleum Corporation (NNPC) to cover the shortfall between its cost of importing petrol and the pump price.

Osatuyi, however, stated that the petrol subsidy has eroded significantly, revenues that should have been available to fund this year’s budget.

The IPMAN National Operations Controller said: “The President has identified the problem and the solution is to remove the subsidy.”

He, however, noted that before proceeding with the policy, the government should provide alternatives to Nigerians in order not to increase inflation in the country.

According to him, there is an urgent need to switch massively to gas utilisation in Nigeria because the country has over 200TCF of proven reserves of natural gas.

Osatuyi further said the government should focus on the implementation of the autogas scheme and distribution of free cooking gas cylinders because they would help cushion the effects of the full deregulation of the downstream sector.

He called for the reduction in the cost of governance to eliminate borrowing to fund parts of the budget annually.

“If as a government your total revenue is N8 trillion and you are preparing a budget of N13 trillion, it means you will have to borrow to fund the budget.

“You can decide to reduce cost of governance and block revenue leakages so that you don’t need to borrow to fund your budget,” said IPMAN chief.

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