…FG should adopt measures to reduce impact on citizens – Oilserv boss

By Udeme Akpan, Energy Editor & Ediri Ejoh

THE Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, has cautioned against the current panic over the planned removal of petrol subsidy in Nigeria.

The panic started, yesterday, after President Bola Tinubu’s inaugural address, stressing, “We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. The subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.”

Checks by Vanguard indicated that some marketers responded by increasing their prices by about 100 per cent to more than N370 per litre, from N185 per litre, while others shut their gates against motorists and other customers.

But in a statement obtained by Vanguard, the NMDPRA, stated: “The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) wishes to address concerns regarding the announcement of the removal of subsidy on Premium Motor Spirit (PMS) by President Bola Ahmed Tinubu.

“Contrary to speculations and concerns, the announcement is in line with the Petroleum Industry Act (2021) which provides for total deregulation of the petroleum downstream sector to drive investment and growth.

“We are working closely with NNPC Limited and other key stakeholders to guarantee a smooth transition, avoid any disruptions in supply as well as ensure that consumers are not short-changed in any form.

“The Authority assures that there is ample supply of PMS to meet demand as we have taken necessary steps to ensure distribution channels remain uninterrupted and fuel is readily available at all filling stations across the country. We, therefore, call on Nigerians to remain calm and resist the urge to stockpile as it poses a significant safety hazard.

“The NMDPRA reassures all Nigerians that the removal of subsidy on PMS is a step towards building a more sustainable and prosperous future for our nation. We will continue to monitor activities and implement necessary measures to enhance transparency and accountability in the petroleum downstream sector.”

However, in an interview with Vanguard, the founder and chairman/CEO of Oilserv Group, Engr. Emeka Okwuosa, said “From an industry and economic perspective, it’s no brainier for us to know that what we term as a subsidy is unsustainable. The development to remove subsidy is a good one. Subsidy disturbs the demand phenomenon, creates cabals, and creates inefficiency.

“Subsidy has never been the smart way of growing an economy and subsidy is not sustainable. You need to know that subsidy is consuming a lot of revenue for the country and making it impossible for the government’s good intentions and programs to materialize as well as reducing poverty.

“Now, you find out why subsidy appears to help people who are at the lower level of the economy, the bottom line is that it is impacting them negatively. Another way to look at it is that the subsidy is mainly for petrol. AGO (otherwise diesel) is not subsidized. The question so much asked is who benefits from petrol in Nigeria? They are those who have cars. Anybody who owes a car is not poor and should be able to fuel the car.

“The poor don’t drive cars. You may also make an argument that some of this PMS which is petrol is used to fuel some transportation systems but remember that it is not in a very large proportion.

“A big proportion of mass movement vehicles like buses are powered by diesel and of course, as the country moves forward some of the buses would be driven by electric systems. And so, the point is that processes can be put in place to reduce the rate of petrol-driven cars or vehicles for transportation while encouraging the use of electric, gas and diesel.

If you look at the budget for this year’s subsidy plan, the money used for subsidy will almost wipe out our entire revenue generated from the oil and gas activities. Who is losing, the answer is Nigeria because we want to help and lose as well.

“For me, the subsidy should have been long removed but a mitigation system must be put in place and made in the short term to lessen the impact of those of the lower level of the economy. For the long term, we need to take action to make sure we are utilizing energy as against what we are doing in terms of transportation.”

Similarly, the Lead promoter, EnergyHub Nigeria, Prof. Felix Amieyeofori, said: “We support it because it is only benefiting the elites. Government should direct the subsidy to other strategic economic programmes. We cannot borrow to pay subsidy.”