The chief executive officer of FSDH Merchant Bank Limited, Hamda Ambah, has said the government must provide palliative measures for Nigerians in the fuel subsidy removal in order to guarantee success in the deregulation of the downstream oil and gas sector.
While speaking in an interactive session in her Lagos office on initiatives to revamp the downstream oil and gas sector in Nigeria, Ambah noted that the perceived apprehension of the masses is genuine as the implementation of the fuel subsidy may lead to increase in the pump price and may further erode the already weak purchasing power of the masses, if no social safety net is provided.
“Government must plan adequately if it intends to deregulate the downstream oil and gas. It should not occur suddenly because the country can no longer afford to pay the increasing amount of subsidy,” she said.
Ambah said the savings to the government from the subsidy removal can be used to provide more primary healthcare centres, increase allocation to the school feeding programme, provide motr funding for compulsory primary and secondary education in the public schools, provide soft loans for the petty traders, invest in the power sector, and other areas that can have direct impact on the masses.
“A critical part of the preparation will involve engaging various opinion leaders, religious organisations, as well as trade and labour unions. It should also come up with a framework on how to deploy the savings that will result from the withdrawal of the subsidy to improve the wellbeing of Nigerians,” Ambah said.
She noted that it would amount to economic suicide if the government continued to subsidise petroleum products in the face of dwindling revenue, considering that from 2017 to 2018, the estimated value of the subsidy jumped from N225billion to N731billion.
“Such a framework must include a transparent tracking mechanism to show that the government is doing what it promises to do after the removal,” she asserted.
She urged the Major Oil Marketers Association of Nigeria (MOMAN) to work and maintain a constant dialogue with the government to ensure the success of the deregulation policy. The private sector players must also be ready for a symbiotic relationship with the government during the process.
“It is necessary for private business concerns to know that they must work with the government to develop plans for deregulation and responding to the concerns and fears that people will have. This will involve informing the people of the true state of affairs in the sector and how the savings that will result will be used for their benefit in the long run, even though there might be some initial discomfort at inception,” she added.
Ambah said it was a fact that the present financial situation of the country is challenging, which makes fixing the margin of oil marketers and the price of petrol untenable in the long run.
