The federal government has been encouraged by the Major Oil Marketers Association of Nigeria (MOMAN) to take into account a full deregulation of the petroleum downstream sector in stages.
They said that the current oil subsidy system is no longer viable and urged discussion about its implementation in order to protect the petroleum industry’s downstream sector.
The demand was made yesterday in Lagos during a web-training for energy journalists by Mr. Oluwole Adeosun, Chairman of the Major Oil Marketers Association of Nigeria (MOMAN).
According to Adeosun, the move was important to lessen the impact of the rapid increase in fuel costs on Nigeria’s industrious population.
He claimed that because of the persistent gasoline shortage, his members don’t take short cuts of the country.
Adeosun also said that MOMAN would continue to work with other key stakeholders, to ensure that it ramp up supplies to retail sites and return to normalcy as soon as possible.
He added, “We envisage a rise in demand during the yuletide season and we are prepared to work round the clock to keep our stations running.”
Adeosun also said there was need for the country to begin the process of price deregulation to reduce the inefficient subsidy.
If the country wishes to implement a subsidy, it must be in areas targeted to help those it should help. Such areas are agriculture and transportation, to reduce food price inflation and generate more jobs for Nigerians.
“In tandem, we must find a way to liberalise supply. We must bring transparency and competition into supply to ensure steady and more efficient supply at optimum prices.
“Imported products must compete with locally refined products to find a meeting point between the need for local refining and competitively low but cost recovered prices for Nigerians for sustainability.
The dialogue with the Nigerian people needs to begin to identify, negotiate and agree these areas and begin implementation to save the downstream industry.
“The industry has been in degradation free fall due to a lack of investment to maintain, renew and grow assets and facilities such as refineries, pipelines, depots, trucks and modern filling stations,” he said.
According to him, these lack of investments contribute in no small measure to fuel distribution inefficiencies and high costs.
“Neither the new refineries nor the refurbished refineries will survive with the refining margins at current pump prices.
The chairman said the exploration, production, refining of crude oil and the distribution of refined products are international businesses with ebbs and flows.
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