THE Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Independent Petroleum Marketer Association of Nigeria (IPMAN) on separate days with the week disagreed on the actual price of petrol upon the complete removal of subsidy.
While PENGASSAN is speculating that that fuel prices in Nigeria would be sold between N360 and N400 per litre after the removal of petroleum subsidy by the federal government, IPMAN, along with other groups in the downstream petroleum industry, on the other hand, argued that petrol price in Nigeria may hit N750 per litre in post-subsidy era.
PENGASSAN’s argument
According to Comrade Festus Osifo, the President of PENGASSAN, while speaking to journalists during the union’s National Executive Council meeting (NEC) held in Abuja on Tuesday, said the Nigerian National Petroleum Company (NNPC) Limited being the sole importer of premium motor spirit (PMS) will determine the petroleum pricing using the Central Bank of Nigeria (CBN) exchange rate.
“Today, the sole importer of PMS into Nigeria is the NNPC. The NNPC is using an exchange rate of the CBN which gives about N400 to N450 depending on the day and depending on the window that you are looking at. So, if you compute that into the model today, PMS should be selling in a region of about N360 to N400,” Comrade Osifo said.
He revealed that the union has had through its organs appealed to its members to make fuel available for Nigerians nationwide just as it threatened to revoke the licenses of petroleum marketers discovered to be hoarding petrol.
“While maintaining our support for the full deregulation of the sector and the significant milestone achieved in this regard, we counsel that efforts be made to increase the pace of the current rehabilitation exercise of refineries and get them back on track in due time,” Osifo said arguing that functional local refineries will not only make fuel affordable but create jobs for Nigerians.
He, however, said the incoming administration must address the currency swap as well as fuel scarcity across the country while noting that palliatives must be made available to Nigerians to mitigate the impact of the removal of petroleum subsidy.
Marketers’ predictions
Speaking earlier at an online workshop on the theme: “Deregulation of the Nigerian Downstream Sector: The Day After”, organised by groups within the petroleum sector, in collaboration with the African Refiners and Distributors Association (ARDA), the marketers enjoined Nigerians to be prepared to pay up to N750 per litre of petrol after the full deregulation of the downstream sector of the petroleum industry.
Chinedu Okoronkwo, the National President of IPMAN, who was represented by the association’s National Operations Controller, Mike Osatuyi, revealed while speaking at the workshop that marketers are in support of the government’s plan to totally remove subsidy on petrol.
Noting that the projected pump price of petrol was likely to drop to around N500 if the government encouraged the Central Bank of Nigeria (CBN) to provide foreign exchange for marketers at the official rate, Okoronkwo urged the government to channel expected savings from subsidy removal to the provision of palliatives for the masses.
The National President of the Nigerian Association of Road Transport Owners (NARTO), Lawal Othman, while speaking at the workshop, noted that the full deregulation of the downstream sector and complete removal of petrol subsidy would introduce a mix of opportunities and challenges into the operating environment.
On his part, the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, said the agency will allow a free market-pricing regime to prevail in the petroleum marketing business in the country once the sector was fully deregulated.
Taiwo Oyedele, the fiscal policy partner and Africa tax leader at PwC, urged the government and the regulators to identify potential pitfalls that could trigger resentment from citizens before, during, and after the removal of the petrol subsidy.
Mr Oyedele said deliberate public sensitisation, industry engagement, and collaboration with civil society organisations were needed to aid public buy-in during the implementation of full deregulation by the government.
He added that in the course of implementation of the policies, the government’s interpretation of its strategy must be issue-based and not confrontational.
In January, the Minister of Finance and National Planning, Mrs Zainab Ahmed, said that it will be more appropriate for the government to begin the implementation of its fuel subsidy policy in the second quarter of the year. The minister noted that the country needs to exit the fuel subsidy regime because it is a very significant contributory factor to revenue loss.
Over the past three decades, organised labour, with strong support and collaboration of the progressive wing of the civil society organisations (CSOs), led by the Nigeria Labour Congress (NLC) remained the major force driving resistance against subsidy withdrawal and other neoliberal policies of subsequent governments.
