Calls for subsidy removal
Fuel marketers have blamed acute scarcity of petroleum products on the subsidy regime by the government.
Speaking at the fifth Lecture & Awards series organised by the Nigerian NewsDirect Newspapers in Lagos at the weekend, the Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Mr Femi Olawore, stated that the elimination of deregulation in the country is the reason for recurrent acute scarcity in the country.
According to him, “there was deregulation in this country.
The elimination of deregulation is the cause of the problem we are facing today. When we had deregulation, we were never faced with this kind of problem because we had only one refinery that was able to produce enough for those that needed fuel in this country.
“The process was that I take my crude to the refinery, processed and take my products away to sell; pure private business with no government participation.”
He said the problems started when the government took over the refinery.
“In the year we had oil boom, which was the period we ought to have developed, all we did was to produce ‘COLA’ (cost of living allowance), which expanded the middle class and more cars were bought with less oil to sell.
“That was how scarcity began in the 1970s. In 1973, government started uniform pricing through enactment of Petroleum Equalisation Fund (PEF) Act. Before then, there was disparity in pump price based on locations.
“The beauty of it was that company ‘A’ selling fuel in Lagos at a price could sell same product at different price in Ogbomoso. Companies A&B could process the same products and sell at different prices based on locations. But when the government took over the refinery, the initiatives died,” he said.
Furthermore, he said as fuel scarcity began, government also began to build more refineries and invested in pipelines, but afterwards, government could no longer maintain the refineries and the pipelines.
“Today, out of 22 government depots, almost none is working and that’s why we should appreciate few Nigerians who were bold enough to take loan and build those depots all over the country, otherwise, it could have been worse.
“The refineries are not working. It is those businessmen that go to the banks, secured a loan and import on behalf of government with an agreement that you should not sell above certain price. The government promised to reimburse whatever the difference between the cost and the recommended selling prices. This is what is called subsidy,” he stated.
He argued that when government refused to pay its outstanding to settle the loan, marketers were forced to stop importation and the resultant consequence is scarcity.
“The government has refused to reimbursed marketers, thinking that they can do it alone, but we know government has never succeeded as sole importer to satisfy the market.
“As we speak, nobody has been paid any reimbursement since August. All payments we received were for products imported since last year, Olawore stated.
He, however, urged the National Assembly to pass the Supplementary Budget President Muhammadu Buhari presented to it to ensure Nigerians have stress free yuletide season as Xmas celebration approaches.
On his part, the Publisher of Nigerian NewsDirect Newspapers, Dr. Samuel Ibiyemi, urged the stakeholders, including the government to put the interest of the Nigerian masses at heart and formulate policies that will improve the well-being of the Nigerian citizens.
He said despite the tough economic terrain, the newspaper has been able to weather the storm and remained strong for the past five years