Oil marketers advised President Bola Tinubu on Tuesday to gradually relax the removal of subsidies on Premium Motor Spirit, popularly called petrol, following the inability of importers to access United States dollars and the impact that this was having on businesses.
This came as Tinubu ruled out a fuel price hike and a reversal of fuel subsidies.
However, marketers of petroleum products encouraged the President to learn from Kenya, stressing that the African country had to return subsidies on petrol to curb the devastating impact that its removal had on Kenyans.
“Let them not do the needful; they will see the consequences. We learned this morning that Kenya, which equally removed subsidy and noticed that its effect was so hard on the citizens, has again resumed the subsidy regime for the period of two months,” the Secretary, Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja, Mohammed Shuaibu, told our correspondent.
He added, “Government is about the people, and it must have a listening ear. For Nigeria, how can we be an oil-producing nation with four refineries when all of them are down? We now depend on imports.
“When he (Tinubu) announced that thing (subsidy removal), we said it was going to bring problems. Are we not feeling the consequences of that announcement now? It is forex that largely determines the cost of petroleum products here.
“Marketers are not willing to import products again, so if the government is going to relax the removal of subsidies for a while, it should better do that as a matter of urgency.”
Shuaibu argued that despite the fact that the Nigerian National Petroleum Company Limited announced earlier on Tuesday that it had no intention of increasing the price of petrol, the cost of the commodity would rise above its current N617 per liter in weeks if the exchange rate continued to increase.
“Relaxing subsidy removal is going to be a very wise decision right now, because going by the price of the dollar, the cost of gasoline is bound to rise. In fact, some oil marketers are ready to join the labor union to protest,” he added.
Some dealers had said a subsidy on petrol would gradually creep in should the NNPCL continue to sell at N617 per liter, particularly if the rise in the forex rate persists.
The National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, said the outright removal of subsidies would cause severe hardship.
“I’ve been saying this even before the subsidy on gasoline was removed. How can you stop subsidy without anything on the ground as palliatives?
“Trips that used to be N5,000 in the past are now over N15,000. Businesses are shutting down. The suffering is rising. The government has to intervene now,” he stated.
The IPMAN PRO had earlier explained that the price of imported commodities, including gasoline, would continue to rise as long as the rate of exchange of the dollar increases.
“Once there is a slack in the naira against the dollar, there is going to be an effect. The demand and supply of forex are key factors. We should also understand that it is not only petroleum products that use forex.
This came as the Nigeria Extractive Industries Transparency Initiative advised the government to initiate and implement a deliberate policy that would attract investors to invest and help in fixing Nigeria’s refineries.
In its latest policy advisory for the oil sector, NEITI advised the Federal Government to come up with a deliberate policy to encourage private investments in refineries.
“A deliberate policy initiative should be implemented with full Presidential backing to encourage Nigerians and foreign investors already awarded licenses to establish private refineries in Nigeria.
“The incentives may include tax holidays, institutional support, and availing potential investors in the downstream sector of the available opportunities within the existing ‘Federal Government ease of doing business policy.’
Also calling for intervention, the Executive Secretary of the Major Oil Marketers Association of Nigeria, Clement Isong, earlier stated that it was high time the government intervened.
“Well, the President himself said in his speech that if they found petrol prices moving too high, they would intervene. We don’t want prices to move too high; nobody wants that.
“So if the dollar continues to climb, we are expecting some sort of intervention from the government based on what the President said,” the MOMAN official stated.
Similarly, the National President of the Natural Oil and Gas Suppliers Association of Nigeria, Benneth Korie, told journalists that one of the best options before President Tinubu currently was to hasten the repair of Nigeria’s refineries.