PMS: Price deregulation key to final removal of subsidy, says Adeosun

Tankers are waiting to discharge their contents

Nigeria requires a vibrant process of deregulating prices of petroleum products in order to fully  eliminate subsidy regime in the country, the Major Oil Marketers Association of Nigeria ( MOMAN) Chairman, Mr Olumide Adeosun, has said.

MOMAN, which is a parallel institutiion to the  Independent Petroleum  Marketers Association of Nigeria ( IPMAN), boasts of eight strong marketing firms in the nation's fuel sub-sector.  The firms include Mobil, Conoil, 11 Plc, Total Energies OVH Energy MRS and African Petroleum (AP) .

Speaking yesterday, during a media workshop with the theme:  Deregulation- Understanding the Downstream Value Chain. Adeosun said the event provides an opportunity for stakeholder to address some issues that have been lingering in the industry for sometime now. 

Citing lingering fuel crises in Nigeria, Adeosun, who doubles as the Chief Executive officer, Ardova Plc stated that disruptions in the energy supply chain has resulted in queues at filling stations across the country. 

According to him, the country needs  a deregulated price mechanism programme, if it would bring payment of subsidy to an end and  further save the country huge amounts for economic growth.

In the media workshop/ training, which was addressed through virtual in Lagos, Adeosun urged the industry to deregulate its downstream sub sector in phases in order to cushion the effects of the impact of a sharp rise in Petroleum Motoring Spirit ( PMS )prices on the long-suffering and hardworking citizens of Nigeria.

Continuing further, Adeosun cited agriculture and transportation as two  of the industries, which are in need of subsidy in the country. 

He said: " If the country wishes to implement a subsidy, it must be in areas targeted to help those it should help such as in agriculture and transportation to reduce food price inflation and generate more jobs for Nigerians." 

He advised the government to find a way of 

liberalize supply of fuel, adding that the government must  bring transparency and competition into supply to ensure steadier, more efficient supply at optimum prices. 

Imported petroleum products, Adeosun said,. must compete with locally refined ones in order to find a meeting point between the need for local refining and competitively low but cost recovered prices for Nigerians for sustainability.

He added that MOMAN would continue to work with other stakeholders in the industry, in order  to enable it  ramp up supplies to its retail sites and return them to  normalcy as soon as possible. 

We envisage a rise in demand during the yuletide season and are prepared to work round the clock to keep our stations running.

To cut corners would be irresponsible, unaccountable, and unsustainable.

The dialogue with the Nigerian people needs to begin to identify, negotiate and agree these areas and begin implementation to save the downstream industry which has been in degradation freefall due to a lack of investment to maintain, renew and grow assets and facilities such as refineries, pipelines, depots, trucks, and modern filling stations. These lack of investments contribute in no small measure to fuel distribution inefficiencies and high costs. Neither the new refineries nor the refurbished refineries will survive with the refining margins at current pump prices.

The exploration, production, refining of crude oil and the distribution of refined products is an

international business with ebbs and flows and has specific models, guidelines, rules, and norms

designed to protect and sustain consumers of this type of energy and populations impacted by its supply ichain. The Government and the industry in Nigeria must demonstrably apply these accepted health, safety, environmental protection, and quality norms to be seen to care for its local populations. To cut corners would be irresponsible, unaccountable, and unsustainable.

MOMAN continues to work with other key stakeholders to ensure that we ramp up supplies to our retail

sites and return to normalcy as soon as possible. We envisage a rise in demand during the yuletide season and are prepared to work round the clock to keep our stations running.