Oil merchants projected that if the PMS subsidy is abolished, the price of the item will exceed N800/litre as the Premium of Motor Spirit, or gasoline as it is more popularly known remained limited on Sunday.
Industry sources claim that the high cost of gasoline subsidies was a burden on the Nigerian National Petroleum Company Limited, which contributed to the protracted crisis in the downstream oil sector. Nigeria only imports gasoline from NNPC.
The minister of finance, the budget, and national planning, Zainab Ahmed, recently suggested that the government progressively stop providing subsidies for PMS while pointing out that the planned amount for the subsidies will run out in June.
However, oil marketers warned our reporter that while it could be wise to eliminate the subsidy, Nigerians should be aware that once the good was no longer being subsidized, the price of gasoline might reach N800/litre.
Before putting the judgment into effect, they encouraged the Federal Government to make sure that all the required infrastructure and measures were in place to enable a less demanding subsidy removal regime.
“The situation will get worse if the government does not act appropriately, even though they claim to want to abolish fuel subsidies. The people will suffer.” If you don’t have this commodity (petrol), how can you eliminate subsidies? asked Mohammed Shuaibu, secretary of the Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja.
“Where is the product?” he continued if the government removed the subsidies. If you remove the subsidy, perhaps by that time we could be purchasing gasoline for N800 per liter, if not more, similar to how diesel is sold today for between N800 and N900 per liter.
“This is due to the fact that the product will be limited, despite the government cycle. Therefore, the government must inform Nigerians of the reality of the fuel supply crisis. The issue was not brought on by marketers.
When oil marketers received their items a few weeks ago, the lines vanished, according to Shuaibu, who also emphasized that they were ready to sell.
However, in the current state, there are jerrycan-selling black marketers everywhere, prompting the question, “Where are the security agencies and the regulators?” He queried.
The IPMAN representative continued, “By tomorrow they will argue that it is the marketers’ responsibility. How? Being businesspeople, we all desire financial success. You are familiar with the law of supply and demand. Prices will increase when a product is in short supply, and vice versa.
He clarified that the downstream industry was not set up for sufficient competition and added that this could present problems when the subsidy was eventually eliminated.
By the time you remove the subsidies, you ought to be aware that the market hasn’t been adequately opened and that there is no competition. The Dangote Refinery is always mentioned. We must recognize that Dangote is a privately held business.
“That facility’s pipelines weren’t even intended to travel through any states in Nigeria; instead, they were meant to travel to neighboring nations, with the possible exception of that one in Lekki.
Because the single supplier has the deciding vote when there is no other source, the refinery may still essentially take advantage of us. Because there would have been competition if Dangote had been producing in Lagos, someone else had been producing in Warri, and one refinery had been pumping in Abuja.
“We can see, for example, the competitiveness in the telecommunications business today,” he continued. However, despite the fact that we are aware that the Dangote Refinery cannot effectively fix the issue, the government will continue to mislead us.
He claimed that Nigeria shouldn’t entirely rely on the facility and emphasized that the majority of the refinery’s pipes were laid to neighboring countries to supply them with gas.
The IPMAN official said, “They shouldn’t keep chanting it as if it’s what will fix our gasoline supply difficulties.