Subsidy Removal: MOMAN tasks FG on effective, sustainable palliative measures

The Major Oil Marketers Association of Nigeria (MOMAN) has urged the Federal Government to focus more on effective and sustainable palliatives for Nigerians to ease their hardship.

The Chairman of MOMAN, Mr. Olumide Adeosun, gave the advice, during an online interactive workshop session with journalists in Lagos.

Our Energy Correspondent, National, reports that Adeosun said that effective and sustainable implementation of the gains from subsidy removal remain paramount for stability.

He said that in the spirit of transparency, MOMAN advocated for federal, state, and local governments, as well as employers of labour to implement palliative measures.

According to him, this is to support less privileged individuals in society, currently facing hardships.

He said that it was essential that rapidly executed palliative measures receive wide publicity to alleviate the already agitated public sentiments.

“At MOMAN, we have always anticipated that the removal of subsidies and the stabilisation of the downstream market would be a gradual process.

“This process necessitates operators and regulators to engage the public transparently, earn public trust, and foster fair competition that ensures full value for customers at the fuel pumps.

“We commend the authorities for their urgent efforts in opening the market, allowing various players to import petroleum products into the country.

“This market liberalisation and the commitment to a level playing field should enhance operators’ efficiency, enabling them to offer competitive pricing choices to the public,” he said.

Adeosun said that some operators have successfully imported petrol into the country, marking the first practical step toward a liberalised market.

He, however, said that the major challenges still lie in accessing foreign exchange for imports and ensuring a level playing field regarding pump prices.

He said: “If marketers are undertaking the financial risk of importing petrol, measures must be in place, in line with the Petroleum Industry Act, to ensure that no one player has an unfair advantage.”

He advised that these gains should be invested in the promised palliatives, including subsidized transportation, as well as social investment programmes for healthcare, education, and infrastructure development (such as roads, railways, and power).

He said that MOMAN urges that these initiatives be rolled out in a visible, transparent, and timely manner.

According to him, “Need to focused and sustained increase in our national production of crude oil from the current 1.2 million barrels per day to closer to 2 million barrels per day.

“This will bring the much-needed foreign exchange.

The chairman reiterated the association’s support for the policy of deregulation in the petroleum industry.

“We also acknowledge the challenges faced by the Nigerian public and extend our deepest empathy to all citizens during this time.

“The international price of crude oil and the exchange rate constitute the largest components of the cost build-up for Premium Motor Spirit (PMS), accounting for over 80%.

“The remaining 20% includes statutory dues, distribution costs, and margins.

“Deregulation promises a transparent and level playing field where cost-reflective prices are evident at fuel stations.

“It follows, therefore that in a liberalized market, the pump price of PMS should accurately reflect the current economic realities,” he said.

Adeosun said that in recent months, the price of petrol has remained relatively stable.

He said that on May 30, Platts reported a price of $827 per metric ton (MT), and on July 14, it was $859.25 per MT.

“However, there has been a significant increase in the foreign exchange rate.

“We can infer from our calculations in May that the Nigerian National Petroleum Company Limited (NNPCL) determined its pump price using an exchange rate of about N630 to the dollar.

“While banks reported an exchange rate of approximately N650 on the Investors and Exporters (I&E) window.

“As of today, the liquid exchange rate is close to N825 to the dollar.

“This devaluation added N100 to the cost of importing a single litre of petrol into the country.

“Consequently, an increase in the pump prices of petrol should be expected,” he added.

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