NEW PUMP PRICE: Clamour for total fuel subsidy removal heightens

Less than 24 hours after the Federal Government in­creased the pump price of petrol from N86 to N145 per litre, some prominent Nigerians, fuel marketers and other stakeholders have asked the Presidency to add more bite to the measure by completely re­moving subsidy on Premium Motor Spirit.

While praising the government for taking the bold step, the eminent Nigerians, who included elder statesman, Alhaji Tanko Yakasai, Senator Mao Ohuabunwa, National Secretary of the Independent Petroleum Marketers Association of Nigeria, Mr. Danladi Paschali, Chairman and Chief Executive Officer of Britannia-U, Mrs. Uju Ifeji, among others, appealed to President Muhammadu Buhari to totally deregulate the sector.

In separate reactions to the new pump price, they said that the best time to fully remove subsidy on pe­troleum products is now and list­ed the benefits that would accrue to Nigerians if the policy is diligently implemented.

According to Paschali: “What we want is total deregulation. That is what we have been clamour­ing for, because it will open up the space, encourage investment in the sector and improve competi­tion, which will bring down the fuel price.”

Paschali, who spoke on the Af­rican Independent Television immediately the new fuel price was announced, declared that the old price regulation regime had only been effective in Lagos, Abuja and a few other places while other parts of the country had been buying pet­rol at exorbitant rates.

The IPMAN scribe said the present N145 per litre peg would only last for a short time as many stakeholders would go into both importation and refining of the product, which would lead to the market being saturated and, even­tually, a fall in the price through competition.

Yakasai, who commended Federal Government’s decision to remove fuel subsidy, said billions of Naira used to subsidise the impor­tation of petroleum products could be channelled into the development of the country in the interest of or­dinary Nigerians.

In a press statement made available to The AUTHORITY in Kano titled “My Reaction to the Partial Withdrawal of Fuel Subsidy,” which he personally signed, Yakasai noted that before now, marketers and smugglers were the main ben­eficiaries of the fuel subsidy fund.

He said: “I have been a strong supporter of the withdrawal of fuel subsidy for the past 20 years or thereabout. I have many reasons that informed my position. First is that ordinary Nigerians are not the actual beneficiaries of the sub­sidy regime, rather marketers and smugglers have been the main ben­eficiaries of the policy.”

“Besides, as long as the pe­troleum products price would be cheaper in Nigeria than in our im­mediate neighbouring countries, nobody can stop smuggling of the products from our country to our neighbours, which explains the in­effectiveness of the control of pump price in the country,” he added.

“If the government removes the subsidy, the money that would be saved as a result can be put to better use in dealing with more pressing problems bedevilling our nation such as endemic unemploy­ment, dilapidated infrastructure, modernisation of agriculture, ad­dressing the need for robust edu­cation and healthcare programme that can better the lot of our people.”

Senator Ohuabunwa who endorsed the price modulation of the down­stream sector of the petroleum in­dustry and the removal of fuel sub­sidy from petrol, told newsmen in Abuja that government ought to have enforced a total deregulation regime of the sector without setting a price cap.

He explained that with the price cap, there would be more problems as the market forces of demand and supply would not be allowed to effectively drive down the price of the commodity.

The lawmaker said the new price cap might be obtainable only in the major cities of Abuja, Lagos and Port Harcourt, while the prod­uct would still be sold for higher rates in other areas.

“I cannot understand if it is in­crease, regulation or deregulation, but I am an advocate of deregula­tion. I have always said that it is im­portant for the market forces to de­termine the price.

“I do not even know what to call this one, because if you want to deregulate, you do not have to put a price cap because with the price cap, you have created more problems.

“It should have been left at de­regulation and people should im­port and sell at the price that best suits them to make profit. Total deregulation is the only way out so that there would be competition like we have in other developed countries.

“Now that you said N145, it means you can get it at that price in Abuja, Port Harcourt and Lagos but outside those, you cannot get it at N145, which means you have even increased our problem,” Ohuabun­wa said.

The Chairman, Chief Execu­tive Officer of Britannia-U, Mrs. Uju Ifejika commended the Min­ister of State for Petroleum Re­sources, Dr. Ibe Kachikwu, for the removal of fuel subsidy, saying the action was long overdue.

Ifejika told The AUTHORI­TY that the continued retention of petrol subsidy over the years had robbed both the Federal Govern­ment and Nigerians of the huge sums being ploughed into it even when “people don’t get the product at the regulated price.”

Recalling that there was no pro­vision for subsidy in the 2016 Budg­et, Ifejika, who is also the CEO of the Integrated Oil and Gas Com­pany, insisted that there is a limit to what the Nigerian National Petrole­um Corporation could do, given the prevailing circumstances.

According to her: “Getting the dollar is very difficult and it is not sustainable getting a double digit loan to import fuel, only to sell be­low the price.”

Chairman of IPMAN in Niger State, Alhaji Adamu Erena said the increase in the pump price of fuel is unjustifiable because what the asso­ciation expected was total removal of subsidy from petroleum prod­ucts and not pump price increase.

Erena said the increase would have negative effects on the mass­es because prices of goods and ser­vices would go up.

The Zone 6 Secretary of the National Union of Road Transport Workers, Alhaji Ibra­him Salihu, said the union would meet next week to decide on the new fares to be introduced in the face of the new pump price.

Similarly, Prof. Peter Emeka Katchy, an Onitsha-based current affairs analyst and alternative med­ical practitioner, has lent his voice to the removal of oil subsidy and the new fuel price, stressing that the lingering supply crisis was caused by mismanagement and policy in­consistency on the part of the fed­eral government.

Katchy, who is the Nation­al President of the Association of Complement and Alternative Medicine Practitioners of Nigeria, noted that since 1970, there have been a lot of policies on fuel that were discontinued and discarded by successive governments.

He noted that since 1970, there has never been a fundamental sys­tem and structure established to run fuel, oil and gas as a continu­ous process in Nigeria.

The alternative medical prac­titioner blamed the existence of oil subsidy on lack of functional refin­eries, stressing that no sane gov­ernment would spend money as oil subsidy if there were functional refineries in the country.

To the Leader of the House of Representatives, Hon. Femi Gba­jabiamila, there is need for a review in the minimum wage of workers to cushion the ef­fects of the deregulation of the pe­troleum sector by the government.

Gbajabiamila told newsmen in Abuja yesterday that the call be­came necessary in view of the need to meet the rising cost of living in the country.

According to him: “There has to be a serious review of the min­imum wage if you are going to in­crease the pump price of petrol be­cause we all know everything rests on that.

“Prices are going to skyrocket-from school fees to food, transpor­tation, school uniforms and books. Everything will go up because of the mono economy we operate,” Gbajabiamila said.