Fuel subsidy removal: Economic imperative or social burden?
by Test Sep 12, 2024
Petroleum marketers, refiners, and depot owners in Nigeria have called for the full deregulation of the downstream oil sector, seeking to end government price controls due to subsidies.
The Major Energies Marketers Association of Nigeria, in collaboration with the Depot and Petroleum Products Marketers Association of Nigeria, Crude Oil Refiners Association of Nigeria, African Refiners and Distributors Association, and Petroleum Products Retail Outlets Owners Association of Nigeria disclosed this during a webinar on Wednesday.
The discussion, themed ‘Optimising the Nigerian Oil and Gas Industry’, brought together key stakeholders from various sectors of the oil and gas industry to discuss challenges, opportunities, and strategic initiatives for enhancing the sector’s efficiency and sustainability.
In a communique made available to our correspondent on Wednesday by MEMAN, participants were said to have discussed the implications of recent price hikes in petroleum products and emphasised the need for full market deregulation.
“A market-driven pricing mechanism was advocated to promote competitiveness and operational efficiency. The removal of government controls on pricing was seen as essential to fostering a more dynamic and responsive industry.
“The call for complete deregulation and market liberalisation was reiterated. The benefits include improved efficiency, enhanced product availability, and increased private sector participation,” the communique read partly.
There was a strong emphasis on supporting local refineries to decrease dependency on imported petroleum products.
The stakeholders called for freedom for marketers to purchase crude oil from local and international sources and for refineries to enter into processing agreements with retail companies.
The discussions also underscored the importance of transitioning towards cleaner energy sources, including Compressed Natural Gas and Liquefied Petroleum Gas.
The stakeholders also made a proposal for the establishment of a new committee structure in the petroleum sector, inspired by the Bankers’ Committee in Nigeria.
This structure, they said, would include a Midstream and Downstream Industry Coordination Committee to focus on enhancing collaboration within these sectors, chaired by the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
