Marketers and other groups in the downstream sector of the Nigerian petroleum industry have said that fuel prices in Nigerias may hit N750 per litre as the Nigerian government plans to remove petroleum subsidy.
The marketers made the disclosure at an online workshop titled; “Deregulation of the Nigerian Downstream Sector: The Day After”.
The workshop was organised by groups within the petroleum sector, in collaboration with the African Refiners and Distributors Association (ARDA).
The downstream actors, in conjunction with economic policy analysts and relevant government agencies, also outlined strategies and measures that should be deployed to ensure the sustainable removal of petrol subsidy.
In January, Nigeria’s Minister of Finance, Zainab Ahmed, said that it will be more appropriate for the government to begin the implementation of its fuel subsidy policy in the second quarter of the year.
The minister noted that the country needs to exit the fuel subsidy regime because it is a very significant contributory factor to revenue loss.
Speaking at the workshop, Chinedu Okoronkwo, the National President of the Independent Petroleum Marketer Association of Nigeria (IPMAN), represented by the association’s National Operations Controller, Mike Osatuyi, revealed that the marketers were in support of the government’s plan to embark on full deregulation of the downstream sector.
Mr Okoronkwo warned Nigerians to prepare to pay up to N750 for every litre of petrol after the full implementation of the subsidy removal.
He noted that the projected pump price was likely to drop to around N500 if the government encouraged the Central Bank of Nigeria (CBN) to provide foreign exchange for marketers at the official rate.
He urged the government to channel expected savings from subsidy removal to the provision of palliatives for the masses. He, however, advised the government to be alert and sensitive to resentment from Nigerians.
Also speaking, the National President of the Nigerian Association of Road Transport Owners (NARTO), Lawal Othman, said that the full deregulation of the downstream sector and complete removal of petrol subsidy would introduce a mix of opportunities and challenges into the operating environment.
In his goodwill message, Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, said the authority would allow a free market-pricing regime to prevail in the petroleum marketing business in the country once the sector was fully deregulated.
Taiwo Oyedele, the fiscal policy partner and Africa tax leader at PwC, urged the government and the regulators to identify potential pitfalls that could trigger resentment from citizens before, during, and after the removal of the petrol subsidy.
Mr Oyedele said deliberate public sensitisation, industry engagement, and collaboration with civil society organisations were needed to aid public buy-in during the implementation of full deregulation by the government.
He added that in the course of implementation of the policies, the government’s interpretation of its strategy must be issue-based and not confrontational.
Participants at the workshop included representatives of the African Refiners and Distributors Association (ARDA), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), and Independent Petroleum Marketers Association of Nigeria (IPMAN).
Others were NNPC Retail Limited (NRL), Petroleum Retail Outlets Owners Association of Nigeria (PETROAN), Federal Competition and Consumer Protection Commission (FCCPC), PricewaterhouseCoopers (PwC), and CITAC Africa, among others.
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