Stakeholders chart path for successful post-subsidy era

As Nigeria gradually prepares for a post-fuel subsidy era, stakeholders in the downstream sector, yesterday, stated that the gains from removal of fuel subsidies can only be achieved through effective change management, identifying potential pitfalls and deploying mitigation strategies.

According to them, to address the unmet national demand through importation, certain guidelines, which should provide the pathway for obtaining foreign exchange, should be made public, and implemented in good time prior to the commencement of price deregulation.

Indeed, the Nigerian Petroleum Downstream Industry, in collaboration with African Refiners and Distributors Association, during a virtual workshop on addressing key challenges and outlining strategies to ensure a sustainable future for the petroleum downstream sector, stated the need to limit and mitigate against supply gaps and price volatility, related to exposure to international markets, and winning public support

While the workshop focused on risk management and self-regulation, effective change management, and communication and stakeholder engagement, the stakeholders called for proactive planning and implementation of the “adoption of gas” initiatives as a transition fuel towards achieving Net Zero targets.

The operators also highlighted the need to safeguard consumers’ interest in a deregulated environment.

For an effective post-subsidy regime, the stakeholders identified the implementation of appropriate palliatives for public transportation and the transportation of agricultural produce as the country journeys towards full deregulation, improving access to foreign exchange and trade finance, ensuring strategic stock, and providing access to crude oil for refineries.

“Additionally, the workshop discussed open access and optimizing the country’s logistics infrastructure, including pipelines, pumping stations, and storage depots. The workshop suggested that in preparation for a fully deregulated market, the Authority needs to continuously determine local refining capacity, project and request crude oil requirements from the Nigerian Upstream Petroleum Regulatory Commission. To address the unmet national demand, it was advised that the Authority establish transparent, inclusive and competitive guidelines for importation.

“The workshop provided data-driven insights into the sector’s growth potential. Stakeholders emphasised the need for continuous industry engagement, collaboration, and public sensitization to aid public buy-in on new policies by the government.

“The importance of connecting to regional markets, positioning Nigeria as the regional refining hub, and fostering relationships with international service providers, including rating agencies, finance and governance institutions, and aligning with the goals of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP), was reiterated at the workshop.

“Ultimately, the workshop provided a platform for stakeholders to share knowledge and develop strategies to ensure the Nigerian Petroleum Downstream Industry remains a strong, competitive force while transitioning to a more sustainable future. By focusing on risk management, effective change management, and stakeholder engagement, the industry can adapt and make significant contributions towards new jobs, economic growth and prosperity of Nigeria”, a communiqué issued after the event read in part.