The Executive Secretary/ Chief Executive of Major Oil Marketers Association of Nigeria (MOMAN), Mr. Clement Isong, has called on the Federal Government to remove subsidies on premium motor spirit, popularly called petrol.
He stated that the recent alarm by the International Monetary Fund (IMF) was instructive and indicative of the need to scrap the subsidy regime.
IMF’s Resident Representative for Nigeria, Mr. Ari Aisen, while presenting the latest sub-Saharan Africa Regional Economic Outlook, in Abuja, had warned that with Nigeria’s fuel subsidy payout averaging N500 billion monthly, total expenditure on subsidy could hit a record N6 trillion mark by the end of 2022. He regretted that as an oil exporter,
Nigeria was not only unable to take advantage of the current global high oil prices to build reserves, but was also confronted by low earnings due to the subsidy on petroleum products. Isong, in an exclusive interview with New Telegraph at the weekend, warned that the future of Nigeria was being jeopardised by huge debt, which subsidy was contributing to. He called for talks among stakeholders to address the subsidy regime and Nigeria’s rising debt profile. Isong warned that Nigerians must not be pilling debts and obligations for the younger generation, adding that they should be alive to their responsibilities and pay their bills.
According to him, Nigeria’s debt will keep increasing as he noted that the country will keep borrowing to fund the subsidy. The MOMAN boss also advised the Federal Government to close all avenues of revenue leakages. He warned that continuous borrowing could lead the country to a position where it will no longer be credit-worthy. Isong said: “We all have to be a little bit more responsible as a people. They (FG) have told you that there is crude oil theft. They have told you that there is lower production and that they are struggling to find the money.
So, we have challenges with this government in finding the money. IMF warned that subsidy might reach N6 trillion in 2022. Is that not frightening? Where will the money come from? Who is going to pay? Your children and children’s children? Is that not worrisome? Why can’t you pay your bill? Why pass it on to your children? We should not destroy this country for our children, we should pay our bills.
“Nigerians should have a conversation about reducing consumption and about reducing the subsidy. We need to have that conversation as a people with the politicians. We need to have that conversation because it (subsidy) is definitely not sustainable.
“It is not a good thing, which is why we must have that conversation as Nigerians and see what we can do about it because that susbidy will be increasing our debt. We are praying for the debt and we will be borrowing money and we would borrow to the extent that we may over-borrow. Somebody has to pay for borrowing. So we need that conversation as Nigerians. We need to reduce our consumption to make sure that the subsidy is not that high. We need to block all the loopholes, whether it is by smuggling or whatever it is that is causing the subsidy amount to be that high. We also need to have a conversation about finally removing the subsidy.
“It is time to remove the subsidy. It is not fair on our generations unborn that we are packing up debt to pass on to them. Are you not worried for the children? We should be worried! We should carry our burdens ourselves and not pass the burdens to them.” Following the passage of the Petroleum Industry Bill by the National Assembly and the subsequent assent by President Buhari, the Federal Government, in October 2021, said it would, from June 2022, end petrol subsidy in line with the new Petroleum Industry Act, (PIA), which has commercialised the Nigerian National Petroleum Company Limited (NNPCL).
During the 27th National Economic Summit, the Minister of Finance, Budget, and National Planning, Zainab Ahmed, said the Federal Government had made provision for petrol subsidy till the end of June this year. She said, “In our 2022 budget, we only factored in subsidy for the first half of the year; in the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry.”
But on January 25, 2022, the Minister of State for Petroleum Resources, Mr. Timipre Sylva, said the Federa Government was proposing to extend the period for the implementation of the removal of subsidy on PMS by 18 months. The Minister said government had concluded plans to approach the National Assembly to amend the Petroleum Industry Act (PIA).
