The Independent Petroleum Marketers Association of Nigeria (IPMAN) has endorsed the Federal Government’s plan to phase out subsidies for Premium Motor Spirit (PMS), also known as petrol, by 2021.
Mr Chinedu Okoronkwo, President of IPMAN, told the News Agency of Nigeria (NAN) on Friday in Lagos that the Petroleum Industry Act (PIA) signed into law by President Muhammadu Buhari on August 16 did not include any provision for subsidy.
According to NAN, Mrs Zainab Ahmed, Minister of Finance, Budget, and National Planning, announced that the government would phase out fuel subsidies in favor of a monthly N5,000 transport grant for approximately 40 million poor Nigerians.
“We, as marketers, have always advised the government to remove petrol subsidies because it is not in the interest of downstream sector development,” Okoronkwo said.
“We welcome the government’s decision to phase out gasoline subsidies by 2022, and we hope that it will attract more investment to the sector, especially with the passage of PIA.”
“What we want is a level playing field for everyone in the sector once the subsidy is removed to encourage competition.”
He did, however, advise the government to reinvest the subsidy savings in critical areas such as healthcare, education, agriculture, and other sectors that would increase the country’s revenue.
In addition, Mr Tunji Oyebanji, immediate-past President of the Major Oil Marketers Association of Nigeria (MOMAN), stated that continued petrol subsidies were not sustainable in light of current economic realities.
He stated that the 2022 deadline was realistic, and that its impact might be mitigated by the arrival of the 650,000BPD Dangote Refinery, Bua Group Refinery, Waltersmith Refinery, and other modular refineries.
However, Oyebanji, the Managing Director of 11 Plc, criticized the plan to replace the subsidy with cash transfers to Nigerians due to the country’s lack of a reliable data base.
“In my opinion, such funds should be channeled to areas like education and mass transportation that are accessible to ordinary Nigerians,” Oyebanji said.
Mr Wilson Opuwei, an oil and gas expert, believes that the debate over fuel subsidies in Nigeria should have ended years ago because it was a clear waste of the country’s resources.
Opuwei, the Chief Executive Officer of Dateline Energy Services Ltd., maintained that the fuel subsidy regime primarily benefited the elites.
“We should let market forces determine the price of gasoline and other products, not the government doling out subsidies with funds that we don’t even have,” he said.
“What the government should do is create an enabling environment for businesses to thrive, and once Nigerians are economically empowered, we won’t be having this debate about petrol subsidies.”