FG, marketers on rough path to subsidy removal

The planned removal of fuel subsidy has thrown the Federal Government, petroleum marketers and other stakeholders off balance in a quest to find a smooth transition that would not jeopardise the welfare of the citizenry.

Already, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has warned the Federal Government not to contemplate the removal of the subsidy on petrol without local refining capacity, given its socio-economic implications on businesses and Nigerians.

But the Federal Government said it is currently considering how best to achieve subsidy removal without disrupting the livelihoods of Nigerians.

Permanent Secretary, Ministry of Petroleum Resources, Gabriel Aduda, who disclosed this at the Nigeria International Energy Summit in Abuja said the Federal Government was committed to subsidy removal but could not be too specific until all indices were considered, to ensure that the effect would not be harsh on average Nigerians.

Aduda said although subsidy removal had been in focus for some time, President Buhari, who doubles as Minister of Petroleum Resources, was taking it very seriously, including everyone in the industry.

“We understand the importance of removal of subsidy but we also understand the greater importance of the citizens in the scheme of things. As we speak we are still taking a very close look at how best to achieve subsidy without disrupting the entire ecosystem of livelihood in Nigeria. Because that is our responsibility as government. We have to ensure that the buffers are in place and forex is made available for imports. We have to ensure that supply is available for a minimum of six months to make disruption minimal,” he assured.

He said there were quite several factors to look at but the government was committed to it.

NUPENG, in a recent communiqué signed by the President and General Secretary, Williams Akporeha, and Afolabi Olawale, said the Union, is not averse to the removal of subsidy on petrol but the Federal Government must ensure that the local refineries are put into full operation before such a major policy decision is taken in the interest of the generality of Nigerians.

The Chief Executive Officer (CEO) of Ardova Plc, Olumide Adeosun, who is also the Chairman of MOMAN had said that the issue of removal of subsidy should be treated with urgency.

He explained that for the downstream to be investor friendly there is a need not to delay the removal of subsidy.

“Because if you don’t rip off subsidy in one goal what happens is classic and you get stuck in the middle and you can’t go forward and you can’t move back and you don’t enjoy the benefits of either. We need to be very bold about the decisions we make today, particularly around the hydrocarbon space because it will determine how attractive and bankable our businesses are to the investors” the MOMAN boss advised.

Managing Director of 11 Plc, Dr. Tunji Oyebanji pointed out the need for the government to draw a clear road map and plans for the removal of subsidies, adding that the government should continue to step up consultation with the key industry players on every issue bordering the downstream sector of the oil and gas industry.

Oyebanji advised that whichever way or route the government wants to take to remove subsidy, there are advantages and disadvantages. “Therefore you need a plan. We all noticed what happened during the redesign of the currency, we don’t want to have such confusion in our industry” he said.