As the Premium of Motor Spirit, more commonly known as petrol, continued to be scarce on Sunday, oil marketers predicted that if the PMS subsidy is removed, the price of the good will exceed N800/litre.
The Nigerian National Petroleum Company Limited was burdened by the high cost of fuel subsidies, according to industry insiders, and this contributed to the protracted crisis in the downstream oil sector. The sole supplier of gasoline to Nigeria is NNPC.
Zainab Ahmed, the minister of finance, budget, and national planning, recently proposed that the government gradually remove the subsidy on PMS while highlighting the fact that the budgeted allocation for the subsidy will expire in June.
However, according to ValidViewNetwork researches, oil marketers have warned that while eliminating the subsidy may be a good idea, Nigerians should be aware that if the good was no longer being subsidized, the price of fuel might reach N800/litre.
They pleaded with the Federal Government to wait until all the infrastructure and safeguards for a less strenuous subsidy removal regime were in place before putting the decision into effect.
“If the government fails to take the appropriate measures, and they say they want to remove fuel subsidy, the situation will be worse than this, the masses will suffer. How can you remove subsidy and you don’t have this product (petrol),” the Secretary, Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja, Mohammed Shuaibu, stated.
He added, “If the government removes subsidy, where is the product? If you are removing subsidy, maybe by that time, the way diesel is sold at between N800 – N900/litre, we could be buying petrol at N800/litre, if not more than that.
“This is because the product will be scarce, even from the government cycle. So the government should tell Nigerians the truth about this fuel supply crisis. It is not a problem caused by marketers.”
Shuaibu said oil marketers were ready to sell, stressing that when marketers got products a few weeks ago, the queues disappeared.
“But as it is today, you have black marketers everywhere selling with jerrycans and you will ask, where are the security agencies and the regulators?” he asked.
The IPMAN official added, “By tomorrow they will claim that it is the fault of the marketers. How? We are businessmen and every businessman wants to make a profit. You know the law of supply and demand. When the product is scarce, prices will rise, and vice versa.”
He explained that the downstream sector was not structured for adequate competition, adding that this could also pose challenges when subsidy was eventually removed.
He said, “By the time you are removing subsidy, you should know that the market is not properly opened and there is no competition. They always tell you about Dangote Refinery. We must understand that Dangote is a privately owned company.
“The pipelines of that facility were not even designed to run in any Nigerian state, rather it was designed to run to neighbouring countries, and maybe that one in Lekki there, that is all.
“So, more or less, that refinery might still exploit us, because when there is no competition, the only supplier calls the shots. For had it been that as Dangote is producing in Lagos, another person is producing in Warri, while one refinery is pumping in Abuja, then there will be competition.”
He continued, “We can see, for instance, the competition in the telecommunications sector today. But the government will continue to deceive us that Dangote Refinery will come on stream, when we know that it cannot really solve the problem.”
He argued that most of the pipes of the refinery were laid to neighbouring countries to supply them gas, stressing that Nigeria should not completely rely on the facility.
“They should not continue to be singing it as if it is what will solve our fuel supply problems,” the IPMAN official stated.
The shortage and price increase of Premium Motor Spirit, also known as gasoline, have caused outrage among consumers of the good, particularly drivers, who have turned their ire toward the ruling All Progressives Congress.
Filling stations all throughout the nation are selling the product for more than the advertised price of N185.
This is in addition to the lengthy lines of cars that frequently exacerbate Nigerians’ problems because of the traffic they create when they spill onto major routes.
