The Institute of Chartered Economists of Nigeria, ICEN, has urged the Federal Government not to rely on market forces alone while removing subsidy on petroleum products as there were compelling reasons to reduce poverty and ensure social justice in the country.
Co-ordinator of ICEN in the South – South zone, Friday Udoh who made this known while reacting to the Federal Government’s decision to remove fuel subsidy from next year said that the major reasons Nigerians mainly resisted removal of fuel subsidy or deregulation included corruption, weak regulatory or legal framework, poverty and decayed infrastructure among others.
According to ICEN, there were no in-built mechanisms to guarantee the success of the deregulation policy as the country would only rely on imported fuel since there were no local refineries to compete with foreign companies involved in expected competitions that would guarantee lower prices in the long run to justify the removal of subsidy.
“Altogether, all the antiquities called local refineries produce about 445,000 barrels of crude oil per day if they produce at full capacity but this has never happened in the last 10 years and there are no private refineries.
It is not just the removal of subsidy alone, but ensuring the existence of the enabling laws to galvanize the relationship with the upstream operators for security of feed stock and difficulty in accessing credit facility due to global and domestic financial structure fragility, a situation that calls for government intervention in addressing the challenges.”