The Nigerian Midstream and Downstream Petroleum Regulatory and Nigerian National Petroleum Company Limited, last week called on the Federal Government to stop subsidizing Premium Motor Spirit otherwise called petrol. Speaking during a virtual online workshop with the theme “Deregulation of the Nigerian downstream sector: The day after on Friday, the Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory, Farouk Ahmed, said the Authority supports the full deregulation of the sector adding that it shall allow free market pricing under the new regime.
However, National President, Independent Petroleum Marketers Association of Nigeria, Chinedu Okoronkwo, warned that petrol could cost as high as N750 per litre upon the full implementation of the subsidy removal. Okoronkwo who was represented by IPMAN’s National Operations Controller, Mike Osatuyi, stated that the pump price could drop to around N500 if the Federal Government encourages the Central Bank of Nigeria to provide forex to marketers at the official rate.
In a similar development, the NNPCL at a sensitisation workshop on its operations for National Association of Nigerian Students and Civil Society Organisations in Abuja, said the Federal Government spends a minimum of N4.8 trillion annually on fuel subsidy. Advocating for the removal of subsidy on petrol, the Senior Business Advisor to the GCEO, NNPCL, Lawal Musa said the cost outweighed the direct benefit to the Nigerian masses.
Analysing the missed opportunities in terms of infrastructure development, he said, the amount spent on petrol subsidy could provide 7,500km of road network at N400 million per kilometre and 37 well-equipped 120 Beds Tertiary Health Centres at N32 billion per hospital annually. Presenting a paper entitled “Petroleum Industry Act and the Nigerian Economy,’’ Musa, said alternatively the amount could deliver 500,000 new houses and education and skill up of two million Nigerian students, among others.
Advocating for full deregulation of the product, he said the opportunity cost of the subsidy could have as well provide additional 27,000 megawatts of electricity to Nigerians and build and equip 2,400 hospitals in 774 LGAs. Musa explained that the PMS (fuel) was sold the lowest price in Nigeria among most West African countries in spite of the average cost of $2.7 per litre globally, which amounted to N570 per litre. According to him, verifiable PMS demand data is critical to National planning and energy security.
In an overview of the PIA and New NNPCL structure, Mrs. Oritsemeyiwa Eyesan, the Chief Strategy and Sustainability Officer, NNPCL, said the new entity was incorporated as a commercial company to be run like any other private company in the country, following the provision of the PIA 2021. Mrs. Eyesan, represented by Vincent Ogbu, her Business Advisor said NNPCL’s activities were guided by three core values namely integrity, excellence and sustainability.
She explained that the signing of PIA into law overhauled the institutional, regulatory and fiscal framework for the Nigerian petroleum industry and provided a structured approach for managing host community development and investments. She further said that significantly, the PIA mandated the incorporation of the old NNPC and established NNPCL as a fully commercial entity.
