Oil and gas industry stakeholders have cautioned that the sudden removal of fuel subsidy will cause great hardship for the already impoverished Nigerian population.
At a roundtable discussion with industry stakeholders on “the impact of deregulation on the Nigerian Downstream Petroleum Sector: Analysing perceptions and realities of gains and expectations of full PMS subsidy removal,” participants argued that while eliminating fuel subsidies is a good idea, it should be done gradually.
Peter Esele, a former president of the Trade Union Congress (TUC), explained why Nigeria wasn’t ready for immediate subsidy removal in a speech on the sidelines of the roundtable. He claimed that even though Nigerians struggle to afford PMS at its current price, removing subsidies would raise pump prices to about N300 per litre.
“If you remove the subsidy now, it will mean that Nigerians will be expected to pay N300, so this means we will be increasing poverty and also making life difficult for the people. It all boils down to the incoming administration, what are their plans for the sector. His responsibility is to decide what is best for the people,” he stressed.
Esele encouraged the President-elect, Bola Ahmed Tinubu, to effectively communicate with Nigerians about the advantages of gasoline subsidy removal while identifying the sector’s issues. Esele recommended a four-year cycle for the removal of fuel subsidies.
He added that it is necessary to lower the cost of governance and recommended the next administration to work the negotiations in their effort to improve the economy.
He claims that more than 70% of the budget is currently going toward governance. He forewarned that the nation’s expanding debt profile would make life difficult for the new administration.
“We cannot have any development in the country where we are spending over 90 per cent of our budget to service our debt. The incoming President must be very direct, he must walk the talk and above all, to be able to achieve whatever dream or plans that he has for Nigeria and Nigerians must also be able to trust him, “he said.
Deregulation, according to Dr. Kayode Opeifa, Technical Consultant at Technowell, has led to a variety of opinions and expectations among stakeholders.
Odewumi Samuel, a professor of transport and logistics at Lagos State University, gave a presentation on six steps to removing oil subsidies without chaos. He said efficiency would start with the appointment of a full-time senior minister of petroleum and that it was inefficient for a busy president to hold a crucial ministry as a side portfolio.
In addition, the team is to identify and develop engagement procedures with relevant stakeholders, especially labor, media, students, and civil society organizations. He urged the Tinubu administration to immediately form a committee of a competent team to guide the removal process, which may be headed by the Minister.
