Fuel Scarcity: FG urged to consider phased deregulation

Major Oil Marketers Association of Nigeria (MOMAN) has urged the federal government to consider a full deregulation of the petroleum downstream sector in phases.

They said the current situation of oil subsidy is no longer sustainable and called for dialogue on its implementation to save the downstream sector of the petroleum industry.

Chairman, Major Oil Marketers Association of Nigeria (MOMAN), Mr Oluwole Adeosun, made the call at a web-training for energy journalists yesterday in Lagos.

Adeosun said that the development was necessary to cushion the effects of the impact of the sharp rise in fuel prices on the hardworking citizens of Nigeria.

He said his members eschew cutting corners in the ongoing fuel scarcity in the country.

Adeosun also said that MOMAN would continue to work with other key stakeholders, to ensure that it ramp up supplies to retail sites and return to normalcy as soon as possible.

He added, “We envisage a rise in demand during the yuletide season and we are prepared to work round the clock to keep our stations running.”

Adeosun also said there was need for the country to begin the process of price deregulation to reduce the inefficient subsidy.

“If the country wishes to implement a subsidy, it must be in areas targeted to help those it should help. Such areas are agriculture and transportation, to reduce food price inflation and generate more jobs for Nigerians.


“In tandem, we must find a way to liberalise supply. We must bring transparency and competition into supply to ensure steady and more efficient supply at optimum prices.

“Imported products must compete with locally refined products to find a meeting point between the need for local refining and competitively low but cost recovered prices for Nigerians for sustainability.

“The dialogue with the Nigerian people needs to begin to identify, negotiate and agree these areas and begin implementation to save the downstream industry.

“The industry has been in degradation free fall due to a lack of investment to maintain, renew and grow assets and facilities such as refineries, pipelines, depots, trucks and modern filling stations,” he said.

According to him, these lack of investments contribute in no small measure to fuel distribution inefficiencies and high costs.

“Neither the new refineries nor the refurbished refineries will survive with the refining margins at current pump prices.

The chairman said the exploration, production, refining of crude oil and the distribution of refined products are international businesses with ebbs and flows.


FI