30/05/2023
The Independent Petroleum Marketers Association of Nigeria has opposed the plan by President Bola Tinubu to enforce his predecessor’s decision to remove fuel subsidy by June ending.
This was contained in his inaugural address earlier on Monday, in Abuja, where he affirmed that his administration would not continue to pay subsidy on petroleum products.
He said given the high opportunity cost the Federal Government was suffering to fund subsidies, it was no longer justifiable to continue.
“The fuel subsidy is gone!” Tinubu exclaimed, shortly after he was sworn-in as the 16th President of Nigeria.
The President said “Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.
“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor.” He further said that since there was no provision for subsidy in the budget
However, while reacting on Monday, The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, said the new government should dialogue with marketers before taking the decision to remove subsidy.
“We are not in support of the removal of fuel subsidy at this time. We have said it repeatedly that our refineries should be fixed before taking such decision that will cause galloping inflation and inflict more hardship on the masses.
“The government of President Tinubu should not adopt what is in the transition document handed over to it by the administration of former President Muhammadu Buhari. Someone (Buhari) who for eight years did not remove subsidy is advising a new government to remove it.
“That is not fair and should not be adopted. Rather the new government should sit and discuss with marketers and other stakeholders on how to manage the fuel subsidy regime. We now have the Dangote Refinery, but all our refineries are still not working, so we don’t think removing subsidy is the right thing to do now,” Ukadike stated.
He said IPMAN was ready to work with the new government and would proffer measures to address the fuel subsidy regime, instead of effecting an outright halt in subsidy.
When contacted to state their position on the issue, the Petroleum and Natural Gas Senior Staff Association of Nigeria stated that it would not comment on the development now, as it was currently studying the new administration.
“We wouldn’t want to comment on the fuel subsidy removal matter now because we are still studying the situation and the new government of President Tinubu,” the General Secretary, PENGASSAN, Lumumba Okugbawa, stated.
While IPMAN insisted that subsidy should not be removed without the repairs of Nigeria’s refineries, the Major Oil Marketers Association of Nigeria maintained its position that fuel subsidy should stop.
The Executive Secretary, MOMAN, Clement Isong, said Nigeria was burning its earnings by paying trillions as subsidy on petrol.
“Currently, we are told that this year that we are to spend about N6tn on subsidy. I am sure that in our hearts we all know that if we invested that N6tn in sustainable programmes, it will grow the economy. It is a better way to go than to burn it in fuel subsidy. We all know this,” he stated.
Fuel queues resurface
Barely a few hours after Tinubu’s announcement on subsidy, fuel queues resurfaced in Abuja, Lagos and some states.
Motorists besieged filling stations in Abuja, Nasarawa and Niger states on Monday afternoon following the news.
The announcement triggered a rush for petrol at fillings stations in Abuja and neighbouring states by motorists, as they struggled to get their tanks filled, over fear that once subsidy ends, the cost of PMS could rise above N500/litre.
Oil marketers had projected that the cost of the commodity could hit N700/litre, once the Federal Government ends subsidy on petrol in June this year.
“It is not out of place to rush and fill your tank now that you can get the product for less than N200/litre, since the new President has declared that subsidy is gone,” a motorist in the long queue at Salbas filling station, Kubwa-Zuba Expressway, who simply gave his name as Ayoola, stated.
The Conoil filling station opposite the headquarters of the Nigerian National Petroleum Company Limited in the Central Business District of Abuja, also had long queues on Monday afternoon.
In Zuba, Niger State, it was observed that many outlets were shut, as the few ones, like Mobil at Madalla, that dispensed petrol, had queues formed by motorists.
Ogun, Lagos states
Findings by The PUNCH showed that queues had started in some parts of Lagos and Ogun states.
While visiting over 15 fuel stations at the Magboro, Mowe and Ibafo axis of the Lagos-Ibadan Expressway on Monday, it was observed that only two fuel stations were dispensing the product.
One of the fuel stations, Eterna, was selling PMS at N195/litre but there were queues at the place.
At the Akowonjo area of Lagos State, it was observed that only an outlet belonging to the NNPCL was selling fuel as of Monday.
The same situation was recorded at the Anthony area of Oshodi, Lagos.
Experts react
However, the Centre for the Promotion of Private Enterprise has shown support for the decision of the new president, Bola Tinubu, to unify the exchange rate and remove fuel subsidy.
This was according to a statement on Monday by the CPPE’s Chief Executive Officer, Dr Muda Yusuf.
He said “The Centre for the Promotion of Private Enterprise welcomes the decision of the new President, Bola Tinubu, to put in place a unified exchange rate regime. It should be clarified that this is not a devaluation proposition. Rather it is a pricing mechanism that reflects the demand and supply fundamentals in the foreign exchange market, which allows for rate adjustments as and when necessary.
Meanwhile, Some experts said Tinubu needed to engage stakeholders over the removal of fuel subsidy.
A professor of Capital Market at the Nasarawa State University, Uche Uwaleke, expressed support for the move but called for caution in the implementation.
In his submission, the Dean, School of Business and Entrepreneurship, American University of Nigeria, Yola, Adamawa State, Professor Leo Ukpong, also agreed that the fuel subsidy regime was no longer sustainable and needed to go. He said the funds going into subsidising fuel should be directed towards the provision of infrastructure.
“Frankly, it is the right decision. If they end fuel subsidy, what are they going to use the money that they use to subsidise for? It should be used to build infrastructure such that fuel will be cheaper. Use that money as an incentive for foreign investors to come and build refineries in Nigeria. The corruption in the current nature of subsidy is unsustainable,” Ukpong, who is a professor of financial economics said
Cued from THE PUNCH
