Wednesday, July 6, 2022
MARKET UPDATE
Advertisement

TheCable

Oil marketers to FG: Phase out petrol subsidy to tackle supply deficiencies

Oil marketers to FG: Phase out petrol subsidy to tackle supply deficiencies
June 22
17:39 2022

The Major Oil Marketers Association of Nigeria (MOMAN) has called for a gradual price deregulation to tackle deficiencies in the supply of premium motor spirit (PMS). 

Petrol price is currently regulated in Nigeria and the government is expected to make up for a shortfall of about N4 trillion, known as petrol subsidy.

In a media briefing on Wednesday, Olumide Adeosun, chairman, MOMAN, said the current supply framework cannot guarantee steady supplies to the country given the current state of government finances and unpredictable international supply shortages.

“We, therefore, recommend a gradual price deregulation with targeted palliatives (eg. transport and agricultural subsidies) to the public to ease implementation,” Adeosun said.

Advertisement

MOMAN said the current scarcity of petrol is occasioned by supply inadequacy in the last few weeks and distribution challenges created by the unavailability and continuous surge in international prices of automotive gas oil (diesel)

It added that its members were working with “the authority, NNPC/PPMC, NARTO, and other industry stakeholders to make petrol available at the pumps and eliminate the queues as quickly as possible”.

However, in the meantime, it recommended that the “current single supplier strategy be reviewed”.

Advertisement

“The federal ministry of petroleum resources, in collaboration with the ministry of finance and other relevant MDAs, should set up a taskforce to immediately focus on increasing diesel supply through accelerated initiatives to increase local modular refining capacity,” MOMAN said.

“This move will tackle the supply and distribution challenges.”

The association also called for the phased rehabilitation of existing NNPC refineries to hasten the supply of middle distillates.

“MOMAN recognizes and closely associates with the need to ease challenges with respect to high energy and transportation costs occasioned by extraneous circumstances,” the oil marketers said.

Advertisement

“MOMAN shall continually do its best to distribute petrol to its customers across the country and keep exploring opportunities to partner with industry stakeholders, the authority, and the government to ensure the sustainability and institutionalisation of a viable petroleum downstream sector in Nigeria.

“The full deregulation of the petroleum downstream sector and full implementation of the Petroleum Industry Act (PIA) 2021 clearly remains the most viable long-term solution to the country’s supply and distribution challenges.

Meanwhile, Adeosun also said the oil marketers were in talks with Pipelines and Product Marketing Company (PPMC) for the provision of diesel to transporters to allow for efficient distribution of petrol from depots “to hinterlands and our stations”.

Advertisement

0 Comments

No Comments Yet!

There are no comments at the moment, do you want to add one?

Write a comment

Write a Comment