…commitment clipping CBN’s intervention in forex
The controversy over subsidy paymentS on petrol has again re-echoed as the development has denied the country a whopping sum of N12 trillion savings. Emerging facts revealed that Nigeria is literally subsiding petrol for its neighboring countries as petrol per litreissoldtwiceorthreetimes higher in those countries. SofartheFederalGovernmenthasextendedtheimplementation of the removal of subsidycurrentlyputatN6.71 trillion by18months, shifting it very conveniently to June 2023.
Giving credence to the huge loss yesterday in Lagos, an energy expert, Dr. Gabriel Ogbechie, said Nigeria would havesavedatleastN12trillion if subsidyonpremiummotor spirit popularly called patrol had been removed. Ogbechie, who is the Group Managing Director of RainoilLimited, therefore, called on the government to tax petroleum products. He said: “Petroleum Industry Act is yet to be fully implemented following its vpassage in Nigeria. A couple of months ago, we all were looking forward to the passage of PIB with so much excitement.
“For those of us in the downstream space, PIA was like bullet that will solve our long standing problem. Unfortunately, we are still where we are. We thought with the passage of PIB, deregulation willhappeninthedownspace. “With PIA NNPC has transformed from being from a corporation to a limited liability company.
“Essentially, whatitmeans is that by June 2023, the government will decide what to do with subsidy. There is a pricing challenge. Gasoline price is well below global average. The global price for gasoline today is about N586 per litre but in Nigeria,we still manage to buy fuel from N175 to N180 depending on which part of the country you are. We are paying just about 30 per cent of the actual cost of petrol. “How sustainable is this? Your guess is as good as mine. “I believe that government should not only deregulate but should be earning money for fuel. Fuel should actually be taxed.”
He added: “I remember when Obasanjo came and they moved the price to N22 per litre and they started the toll gate, the objective then was that they were committing N1 per liter into a find to fix our road. “Just imagine that if instead of subsidizing fuel, fuel was deregulated and government was actual king taxing fuel, no matter how little and putting money in a fund, you can imagine the kind of impact it will have on our infrastructure. We can not enjoy the type of infrastructure we want in this country without being able to pay for it.
“The cost of subsiding fuel is definitely no longer sustainable. N1.5 trillion we spend on fuel subsidy between January and June, Nigeria has so far experienced two fuel crisis. “All the countries around us are selling fuel more than twice, or three times the cost of fuel in Nigeria. so Nigeria is inadvertently subsiding all our neighbors “There are expected benefits for deregulations: we are going to have saving cost. I expect us to save at least N12 trillion naira which has been spent on fuel subsidy. It would also attract investment and there is going to be gasoptimisation. Therewould also be productavailabilityas, marketerswillbeencouraged to bring in their products.”