The group managing director of Rainoil Limited Gabriel Ogbechie has complained about the federal government’s addiction to keeping Nigerians hooked on cheap petrol, a development that is leading to the detriment of other major infrastructural projects in the country.
Speaking at the National Association of Energy Correspondents ( NAEC) webinar conference, titled ‘Deregulation and Sustainable National Energy Future Through Natural Gas’, Ogbechie noted that unless Nigerian National Petroleum Corporation (NNPC) stop being the sole importer of Premium Motor Spirit (PMS), it will be impossible to stop the fuel subsidy regime.
He explained that the Federal government paid N725 billion as petrol subsidy in 2019 and spent over N101.65 billion on subsidy in the first quarter of year 2020, stressing that with Covid-19, fuel subsidy was “discontinued” in March 2020 by the Petroleum Products and Pricing Regulatory Agency (PPPRA) following the crash in the global crude oil prices which led to price modulation of pump price of PMS.
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Ogbechie noted market fundamentals changed in March 2021 when crude oil price averaged $67/bbl, thereby increased landing cost of petrol to N189.61/ ltr, with estimation that fuel subsidy will hit N102.96 billion at the end of the month.
He lamented that due to lack of clarity from the Ministry of Petroleum on the pricing regime (current and future) has resulted in inconsistent communications form industry agencies, increased speculation by marketers (buy-sell decision making), inconsistent supply of product, panic buying by the public as well as hike in transportation fares and product prices.
Close to a year after the government initially proposed deregulation, the policy is yet to kick-off as the federal government through NNPC remains the sole importer of these products and still calling the shots in the industry as to who should import or how much marketers should sell the products they manage to get.
Also, Labour unions, especially the Nigerian Labour Union (NLC) and the Trade Union Congress, which couldn’t stand the speed at which the pump price was heading as crude oil price rebalances at the international market had held government by the throat after succeeding in reducing the price from N167 to N162 per litre.
