After over a decade of advocacy for the deregulation of the downstream sector of the petroleum industry and removal of all forms of fuel subsidy by the Federal Government, Nigerians at last have accepted that the continued support of fuel subsidy is a mere postponement of the evil day.
On this tweetchat that occurred on 3rd of June 2016, with the popular Political & Social commentator – The Godfather himself; Ayobami Oyalowo (@ayourb on Twitter), we looked at the gains ahead for removal of fuel subsidy in Nigeria.
Q1: Before its removal, what was the main motive of Fuel Subsidy?
A1: Well, fuel subsidy has been a contentious issue with most commentators saying it was fraught with irregularities, fraud and grand larceny. So I think the motive behind its purported removal is to ensure transparency and eschew corruption in the Petroleum downstream sector.
Q2: Unavailability of funds or marketers’ corrupt practices, what’s the more reason for #FuelSubsidy removal?
A2: Like I said, there has been claims and counter claims, so I think the government, in order to sanitize the downstream sector, had to deregulate and allow a level playing field for all players.
Q3: Was there any provision in the #Budget2016 for Fuel Subsidy?
A3: No provision was made for subsidy in the 2016 budget.
Q4: What is the relationship between the removal of fuel subsidy and deregulation?
A4: The relationship is simple – removal of subsidy means anybody who has experience or is interested, can bring in product and sell at any price they wish as long as it is not above N145 per liter.
Q5. What are the necessary steps required to achieve the required deregulation?
A5: The necessary step has been taken – allow level playing field for all major players.
Q6: What do you advise the Federal Government (FG) should do to fast-track the reduction of price of procurement?
A6: The FG should look into the people who got licenses to build refineries and if they are no longer capable, the license should be seized and given to more serious entrepreneurs and businesses who wishes to build refineries in Nigeria.
With a better local refining capacity, hopefully, petroleum products prices will become more competitive.
Q7: What are the important gains in the removal of the subsidy so far?
A7: Firstly, there has been availability of product.
Secondly, if the points I highlighted earlier is taken to, prices will become more competitive. And we can begin to even export refined product instead of crude and thereby make more money.
Q8: Do you think the FG deceived Nigerians for removing subsidy taking #OccupyNigeria protest into consideration?
A8: No, I don’t think so. FG was clear and Nigerians trusts the current leadership to be true to its words, unlike the immediate past government that glorified opaqueness and unbridled corruption.
Q9: What are the obstacles Marketers may encounter as we prepare for the post subsidy era?
A9: The major obstacles I foresee is forex but that is likely to be addresses with the new more flexible forces window as proposed by the CBN.
Q10: Lastly, what recommendations do you have for both citizens and government on how best to benefit from fuel subsidy?
A10: Government should encourage building of more local refineries while fixing the current ones, the benefits include other byproducts such as fertilizers, diesel, kerosene, aside the other advantage of more competitive pricing of products.
It was an amazing tweetchat as the chat did trend worldwide on Twitter.