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Why fuel subsidy should stop in Nigeria −Marketers

*The Major Oil Marketers Association of Nigeria urges the government’s massive investments in various sectors mass transportation, healthcare and education, to ‘successfully’ discourage consumers from petrol subsidy regime

Isola Moses | ConsumerConnect

The Major Oil Marketers Association of Nigeria (MOMAN) has restated though ending subsidy on Premium Motor Spirit (PMS), otherwise known as petrol, in the country will be extremely difficult, the Federal Government has no other option in view of the current economic realities.

ConsumerConnect reports Olumide Adeosun, Chairman of MOMAN, renewed this call at the recent Strategic International Conference of the Association of Energy Correspondents of Nigeria (NAEC), in Lagos.

Adeosun, represented at the event by Clement Isong, Chief Executive Officer (CEO) of the Association, spoke on the topic: “Energy Transition, PIA, Petroleum Pricing and the Way Forward for the Downstream Sector”.

MOMAN, therefore, urged the government’s massive investments in various sectors of the country’s economy, including mass transportation, healthcare and education, to successfully discourage Nigerian consumers from petrol subsidy regime.

Adeosun also noted that  it would remain very difficult to wean Nigerians off cheap PMS.

“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 N5trillion and N6 trillion. Clearly, Nigeria cannot afford this,” said he.

The MOMAN Chairman further stated: “To wean Nigeria off this subsidy, a lot of investment must be done to sensitise 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.”

According to him, the marketers are optimistic that the industry is headed in the right direction with the enactment of the Petroleum Industry Act (PIA) 2021, which he described as an ‘excellent piece of legislation’.

He noted: “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.”

Adeosun also explained that the marketers are convinced that the decade of gas declared by the Federal Government January 2021, is clearly the way forward.

The Chairman, nonetheless, observed that the increase in gas prices worldwide and the unavailability of the product had made it a little more difficult for 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.

“And 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.”

He as well noted while the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has an important 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, we need to move to an era of transparency and information dissemination.” he stated.

Adeosun added: “Energy correspondents need to share as much information as possible with the market and public with respect to cost prices, quality, product specifications, and customer service and pump prices.

“That is the best regulation you can ask for.”

TUC’s position on fuel subsidy

Also speaking at the conference, Festus Osifo, President, Trade Union Congress (TUC), noted that Nigerians are not averse to the removal of petrol subsidy but waiting for the government to win their trust on the burning issue.

Osifo, who doubles as the President of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN),

noted the majority of Nigerians are not really interested in energy transition, but are only concerned about affordable and reliable energy.

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