As Nigerians continue to experience scarcity of the Premium of Motor Spirit, better known as petrol, oil marketers have stated that the cost of the commodity would cross N800/litre once subsidy is removed from the product.
Recall that the Minister of Finance, Budget and National Planning, Zainab Ahmed last year disclosed that the Federal Government would stop the payment of fuel subsidy by the end of June 2023.
While stressing the readiness of the FG to bring an end to subsidy regime in June, the minister recently called for the gradual withdrawal of subsidy on PMS
Oil marketers however noted that while it remains a good idea to remove subsidy, Nigerians should be aware that the cost of petrol could cross N800/litre once the subsidy is removed.
They urged the Federal Government to ensure that all the necessary measures and infrastructure to ensure a less stressful subsidy removal regime were put in place before implementing the decision.
The Secretary, Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja, Mohammed Shuaibu, said,
“If the government fails to take the appropriate measures, and they say they want to remove fuel subsidy, the situation will be worse than this, the masses will suffer. How can you remove subsidy and you don’t have this product (petrol)”.
“If the government removes subsidy, where is the product? If you are removing subsidy, maybe by that time, the way diesel is sold at between N800 – N900/litre, we could be buying petrol at N800/litre, if not more than that.
“This is because the product will be scarce, even from the government cycle. So the government should tell Nigerians the truth about this fuel supply crisis. It is not a problem caused by marketers.”
Shuaibu said oil marketers were ready to sell, stressing that when marketers got products a few weeks ago, the queues disappeared.
“But as it is today, you have black marketers everywhere selling with jerrycans and you will ask, where are the security agencies and the regulators?” he asked.
Speaking further he said,
“By tomorrow they will claim that it is the fault of the marketers. How? We are businessmen and every businessman wants to make a profit. You know the law of supply and demand. When the product is scarce, prices will rise, and vice versa.”
He explained that the downstream sector was not structured for adequate competition, adding that this could also pose challenges when subsidy was eventually removed.
“By the time you are removing subsidy, you should know that the market is not properly opened and there is no competition. They always tell you about Dangote Refinery. We must understand that Dangote is a privately owned company.
“The pipelines of that facility were not even designed to run in any Nigerian state, rather it was designed to run to neighbouring countries, and maybe that one in Lekki there, that is all.
“So, more or less, that refinery might still exploit us, because when there is no competition, the only supplier calls the shots. For had it been that as Dangote is producing in Lagos, another person is producing in Warri, while one refinery is pumping in Abuja, then there will be competition.”
“We can see, for instance, the competition in the telecommunications sector today. But the government will continue to deceive us that Dangote Refinery will come on stream, when we know that it cannot really solve the problem.”
He argued that most of the pipes of the refinery were laid to neighbouring countries to supply them gas, stressing that Nigeria should not completely rely on the facility.
“They should not continue to be singing it as if it is what will solve our fuel supply problems,” the IPMAN official stated.