Oil marketers call for collective approach to mitigate effect of subsidy removal

Worried by the steady rise of crude oil prices, oil marketers have called for a collective approach to mitigate the effect of subsidy removal, saying the impact could be devastating on the most vulnerable in the society.

To achieve this, the oil marketers said there is need for a national discourse among all stakeholders including Government, Labour, Civil Society Organizations, the Organized Private Sector and Operators, not on the merits or demerits of petrol subsidy removal, but on the initiatives that can be taken to ease the impact of the subsidy removal on the most vulnerable in our society.

Major Oil Marketers Association of Nigeria (MOMAN) which is advocating for this initiative said in a press statement titled “After Deregulation, What Next?” on Thursday that the public, which includes the downstream operators are key stakeholders in the Nigerian oil and gas industry.

“We believe that as a country, we have and should move beyond the debate on the arguments for the removal of petrol price subsidies. The discussion we should be having today is how best to maximise the benefits of the removal of price controls and subsidies while minimising the adverse effects of this action on our citizens”, it stated.

According to Tunji Oyebanji, chairman of MOMAN, anyone involved in the fuel supply chain, either as operators or regulators must demonstrate cost optimization in every practical and public way possible.

“In line with the recently launched Nigerian Upstream Cost Optimization Program (NUCOP), efforts must be made to reduce costs of production, administration and governance throughout the petroleum value chain in the Nigerian petroleum sector, (particularly) the downstream, to promote efficiency and competitiveness within the industry and ensure value creation for all consumers,” Oyebanji said.

He stated that, beyond this initiative being limited to the petroleum industry, we believe it is a notion that should be applied to the Nigerian landscape, particularly in the area of governance. He explained that as promised by the government, a visible and measured reduction in the cost of governance throughout the polity would bring about savings which can be directed toward improving the livelihood of the average Nigerian.

This cost optimization initiative would demonstrate to Nigerians the good faith of the decision-makers in both the public and private sectors.

Despite being a country blessed with petroleum resources, Oyebanji said Nigeria still imports refined products, stating that as a country it is necessary to have some clarity as to when optimal internal refining capacity will return to Nigeria. “We need to collect and as a nation, track the progress of work at all the new refineries under construction across the country to ensure they are delivered timely, efficiently and sustainably.”

With a fully deregulated downstream industry, he said, the natural fear and anticipation of Nigerians is the increase in the price of transportation, food items and the attendant economic hardships.

Solutions to these challenges according to the marketers can only emanate from a collective resolve by all stakeholders to face up to these challenges together. “We must as a national debate and share pragmatic and realistic initiatives to mitigate the impact of a pump price increase which could follow a fully deregulated downstream”.