THE planned fuel subsidy removal by the Federal Government may have created a huge gap between the professionals in the sector and the organised labour, as the duo took different positions on the national enigma.
The divergent views are however creating confusion in the system, as stakeholders continue to worry on how government that could not sustain economic projects due to falling crude oil prices, would spend as much as N1 trillion on subsidy and yet Nigerians suffer to get the product.
Deregulation is the process of removing or reducing state regulations typically in the economic sphere. It is the undoing or repeal of governmental regulation of the economy. While subsidy is the money paid usually by a government to keep the price of a product or service low or to help a business or organization to continue to function.
In Nigeria’s case, removal of subsidy in the petroleum sector will allow the market forces to determine the pump price.
The Independent Petroleum Marketers Association of Nigeria (IPMAN), Petroleum, Oil Marketers Association of Nigeria (MOMAN), Nigerian Association of Petroleum Explorationists, (NAPE), the Petroleum Club and industry operators have thrown their weights behind subsidy removal, but the NLC recently moved against the plan.
The Managing Director, Danvic Concept, and oil service firm, Afe Mayowa, said we are consistent clamouring for removal of subsidy and at this point I think government should not go back. Labour is saying no, but most of these labour people have filling stations.
Mayowa, who is a former President, National Association of Petroleum Explorationinst (NAPE), said: “We as the professionals in the industry, what we are saying is that subsidy does not do this country any good. Let government revive the refineries and give licences to the private sector to establish modular refineries. It is not wise for government to continue to pay subsidy especially at this moment when the crude oil prices has dropped to a record low.”
He also urged the Federal Government to intensify its effort on fighting corruption to ensure that the Turn Around Maintenance of the refineries are done ‘at the right time and the right amount’.
“Kaduna has started working and PortHarcourt will soon commence production. Look at what we loosing with respect in respect to subsidy and yet people are suffering to get the product, it is unfortunate,” he said.
The National President, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Francis Johnson, said: “The unions are not against the policy in any way, rather deliberate steps should be taken to address weightier issues of employment, sectorial development, corruption, inefficiency and profitability for the Nigerian state.
“In fact, the Labour movement in Nigeria have been in the forefront of restructuring of the downstream sector for a long time. Sometime ago, between 2000 and 2003, the Unions participated in the various interventionist committees set up by government to address the problems in the industry.
“At a point, we proposed phased deregulation of the downstream sector to enable the Federal Government fix the ailing refineries, grant licenses to private refiners, stimulate investment drive, improve human capital capacity, institute legal and regulatory framework and a whole lot of institutional policy to engender sectoral development.
“If the proposals were taken seriously, we definitely would not be where we are today 15 years after. So, we are not ready for full deregulation yet until those concerns are addressed, otherwise we shall be riding in the air,” he said.
An Economist and Public Analist, Suleiman Lame, of Bauchi State University, said: “What is happening in this country is confusing at times. What I will like to say is that the government should declare their intentions and make sure that their policies have the interest of the masses.
“There have been problems in the sector for some times with the crude oil prices going down and having impact on national earnings, so where do we think government should get the money.
“Government has shown that they want to remove subsidy and they have even go ahead to reduce the pump price, which shows that they have the interest of people at heart,” he said.
The Petroleum Products Pricing Regulatory Agency (PPPRA) on Tuesday announced a 50k reduction in the pump price of petrol.
The Executive Secretary of the agency, Farouk Ahmed, said the commodity, which officially sold for N87 per litre, will now sell for N86.50k per litre, while the ex-depot price is N77.00k.
The new price regime is expected to take effect from January 1, 2016.
