THE Independent Petroleum Marketers Association of Nigeria (IPMAN) reiterates that the Nigerian government’s payment of subsidy is a good enabler of smuggling and long queues, while calling for total deregulation of the downstream petroleum sector.
The National Operations Controller, IPMAN, Mike Osatuyi, discussing the issue in a monitored broadcast today, also indicted the Nigerian National Petroleum Company Limited (NNPCLtd) for using third party means in supplying petroleum products to IPMAN members.
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Osatuyi stressed that the NNPCLtd, being a key supplier of petrol and a competitor in the retail sales, is disrupting the supply chain market.
“What we are experiencing now is market fundamental pricing. But when we deregulate, we cannot be having these issues like smuggling and arbitrary hike. Subsidy makes smuggling to survive because of price disparity with neighbouring African countries,” he said.
He raised concerns on NNPCLtd supplying marketers fuel through third parties, which he said disrupts business, and is part of what causes long queues at filling stations.
According to him, the gaps in fuel supply chain would continue if the government does not enforce subsidy removal, adding that price peg is also major cause of the fuel queues.
Commenting on smuggling, Osatuyi said that government’s agents at the borders are as guilty as smugglers.
He said, “The agencies at the border represent the government. If they are patriotic, there won’t be smuggling.”
He noted that the government needs to sit down with stakeholders to sort out grey areas before transitioning to subsidy removal.
A former General Manager at the NNPCLtd, Babajide Soyode, agreed with Osatuyi that the government must do away with subsidy.
Soyode expressed the belief that if the government removes subsidy “today”, the queues would disappear.
He said, “Smuggling is like an eternal Christmas party. I call on the government to remove subsidy today and tax the fuel, and see the long queues disappear.”
He maintained that if subsidy is removed, marketers and the NNPCLtd. would compete on their own terms on fairly competitive grounds.
“Why don’t we want to do what the rest of the world is doing. If we continue doing the same thing and expect a different result for the next 50 years, we are deceiving ourselves,” he said.
Soyode said subsidy payment had failed to lift Nigeria from poverty, and cheap fuel would only benefit the elites.
He questioned the rationale in government prioritising cheap fuel in the name of ‘subsidy’ than building infrastructure that would lift people out of poverty.
He noted that despite subsidy, Nigeria remains the poverty capital of the world.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.