With the escalating energy costs caused by the Russia-Ukraine war and other factors making it difficult to have a fixed price for petrol, the Federal Government has been urged to begin gradual deregulation of the downstream oil and gas sector to reflect the current price of petroleum products.
Speaking at a virtual meeting with the Federal Competition and Consumer Protection Commission (FCCPC) and the press on Wednesday, the Chairman, Major Oil Marketer Association of Nigeria (MOMAN), Olumide Adeosun said, ‘’no country or authority has control over the cost of energy at present due to the conflict. The impact is having an immense effect on businesses in Nigeria as a consumer country with inactive refining capacity.
He said, ‘’Nigeria should develop initiatives that will help reduce the energy consumption especially as the government cannot continue to sustain subsidy bills.’’
‘’ This is because other countries are adopting measures like closing borders to export which is indirectly locking Nigeria out of the market, while others are passing the cost to consumers.’’
‘’Our subsidy bill,’’ he said, ‘’ is outrageous and we had a prolonged subsidy regime without saving for the rainy day and this has reduced capacities to deal with the impact.’’
Adeosun said, ‘’we want gradual deregulation in phase. Landing cost of the product, the high cost of diesel to bridge products across about 500 kilometres, or run of our stations is enormous, and all of these add up to the cost of doing business and cannot guarantee N165 approved pump price of petrol.’’
‘’ The other option is for business to shut down but I think it is better to have a gradual price adjustment to sustain businesses instead of crippling the economy totally.’’
He attributed the hike in the price of diesel to the inaccessibility of foreign exchange at the official rate; adding that, ‘’the price of diesel would have been lower if not for the scarcity of forex. Marketers source forex from the parallel market at N620 a dollar but even at that diesel cost in Nigeria is about $1.20 a litre as against $1.24 a litre in Kenya.’’
On his part, Consultant to FCCPC, Ikem Isiekwena said, ‘’ the commission is committed to ensuring the protection of petroleum products consumers as enshrined under the FCCPA.
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