Nigeria spent N10 trillion on oil subsidy in 10 years – Oil marketers.

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Nigeria spent N10 trillion on oil subsidy in 10 years – Oil marketers.
Peter Olaniyi     |   

Oil marketers in Nigeria have rejected any attempt to take the country back to the fuel subsidy regime, which gulped N10 trillion of the country’s revenues in the last 10 years.

Rising under the auspices of the Major Oil Marketers Association of Nigeria (MOMAN), the marketers declared that the fuel subsidy policy stagnated Nigeria’s economic growth for 10 years.

Chairman of MOMAN, Adetunji Oyebanji, who stated this during the first webinar organised by the National Association of Energy Correspondents (NAEC), confirmed an earlier report that the N1 trillion annual spending on subsidy has over the years denied Nigerians 300,000 fully equipped primary health care centres; one million classrooms; 16 million boreholes; or 20,000 kilometers of roads.

“The Nigeria’s population has grown to over 200 million people and the country’s revenues have not grown sufficiently to support necessary investments in health, education, and country infrastructure to support the population growth as well as pay subsidy for petrol as it has done for decades. Country revenues can no longer fund petrol subsidies,” Oyebanji declared.

Noting that “artificial interventions in the market such as subsidies usually create room for arbitrages, leading to corruption,” Oyebanji declared; “Nigeria has to make a choice.”

He spoke for MOMAN, an association of major marketers including 11 Plc, Ardova Plc, Conoil, MRS, OVH Energy and Total downstream, reiterating that the waste on fuel subsidy by the country amounted to N10 trillion in ten years; one trillion naira annually; and in 2019 when the wastages was slightly lower, it gulped N752 billion.

Throwing his association’s weight behind the deregulation of the petrol, Oyebanji said; “Nigeria and Nigerians stand to benefit a lot from the policy such as decrease in number of truck accidents and explosions.

“Helping in mitigating the degradation of industry infrastructures. And the not enough margins generated over the years to maintain, renew and upgrade industry infrastructures.”

Stating that deregulation is in alignment with the Nigeria National Petroleum Policy,” the MOMAN boss added that the policy will help in “construction and maintenance of refineries as well as establishing Nigeria as refining hub for Africa.”

The policy, he continued, would also, according to Oyebanji lead to product availability in the country and for exports. It will also lead to and increase in foreign exchange earnings and make Nigeria the centre for innovation and technology.”

Despite these benefits, the MOMAN boss noted that deregularion has some challenges that must also be sufficiently addressed.

“The debate over price deregulation of the downstream sector in Nigeria is as confusing as it is divisive.

“Proponents on both sides have argued this emotive issue sometimes from idealistic, dogmatic or doctrinal perspectives ranging from capitalism versus socialism versus communism or from self-serving interests including business interests (to make profits) or political interest (expressing populist albeit sometimes impractical views) to gain votes.

“An urgent choice had to be made that resulted in a win-win situation for all stakeholders who are affected or impacted by decision within the limits of societal values. Adopting this change, however, had with it, its own set of challenges.”

He highlighted solutions for managing social issues to include ensuring that the Nigerian populace is carried along so that there is a complete buy-in and less resistance to change.

“Ensuring Nigerians see the benefits of contibuting towards the national efforts of implementing a full market friven downstream and Managing the reputational building in the downstream sector.”

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