Experts in the oil and gas sector have called on President Muhammadu Buhari to stop subsidising petrol as they explain that the price of the commodity will not go beyond N100 per litre if the Federal Government terminates the fuel subsidy regime.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had told journalists in Abuja recently that Buhari had allowed the fuel subsidy to continue because of his magnanimity.
But this, according to experts, including Kachikwu, is not sustainable.
Industry experts, who spoke with our correspondent on the subject, stated that the President might feel that the removal of subsidy would result in a rise in the pump price of petrol, but maintained that the cost of the product might either remain the same or would not go above N100 per litre if the government puts a stop to subsidy payments.
They stressed that the fall in the global prices of crude oil had presented the best opportunity for the President to stop the subsidy regime.
The President, Nigeria Association of Energy Economics, Prof. Adeola Adenikinju, said, “The price of crude oil has fallen to as low as $40 per barrel. Therefore, this is the best time for the government to remove subsidy.
“The fall in price has provided the government the best opportunity to remove subsidy now.”
When told that the President had expressed concern that the removal of subsidy might result in a hike in the price of petrol and hardship for majority of Nigerians, the professor said, “The price of crude oil has fallen so low that even if subsidy is removed now, its removal will not have any considerable effect on the price of petrol. It will not cause a serious increase in petrol price and the cost may not exceed N100 per litre. So, it just has to go.”
Also calling for a halt in further subsidy payment, another industry expert, Mr. Dibu Aderibigbe, stated that the Nigerian economy was currently faced with paucity of funds, and wondered why the government would still be paying billions of naira as subsidy.
Aderibigbe, who is the National Treasurer, Independent Petroleum Marketers Association of Nigeria, said subsidy removal would not result in petrol price hike.
He stated, “I say it will not because the business will then be run by the forces of demand and supply. When you have a lot of producers in the market, you cannot just jerk up your price. There are fundamental factors that determine price. One is the price of crude oil; then, the cost of transportation, the refining cost, marketing cost and other issues.
“So, the pump price of petrol will certainly fluctuate with the price of crude, and that is the most important factor here. And the price of crude has been hovering around $40 and $48 per barrel. So, at the end of the day, the final price may not be even higher than what we currently pay. In fact, at best it can’t be up to N100 per litre.
“You can also allow those who want to import the product to go ahead and import, but not the government; and you can also start your refineries. If those who refine locally are charging a high price, then those who are importing will beat them in the business. That competition will ensure price stability and affordability.”
The payment of subsidy by the government has been a contentious issue as stakeholders in the oil and gas sector have on several occasions called on the Federal Government to discontinue the practice, particularly when the country’s revenue is being badly hit by the fall in crude oil prices.
Kachikwu had recently stated that the Federal Government might review refined petroleum products’ prices by January 2016, as he explained that the subsidy arrangement was not sustainable.
He had said, “Frankly, sustaining subsidy based on the rate that we have now is a major problem for the country and is only happening through the magnanimity of the President. We are looking at price modulation.
“By January, we will have a price modulation dynamism that will enable us address the critical issues with the marketers. But the issue of price reduction is not in the horizon at all.”
Similarly, a former Governor of the Central Bank of Nigeria, Prof. Chukwuma Soludo, had advised the President to remove the controversial fuel subsidy and privatise the nation’s refineries immediately.
“The fundamental case against subsidy removal is not economic: it is the fact that the citizens do not trust the government to optimise the use of the proceeds for their welfare. If PMB does not deal with these issues now, I wonder when, if ever,” he had said.
Kachikwu had also stated that the current fuel scarcity across the country was largely as a result of the non-payment of the N413bn subsidy claims to the oil marketers, adding that they all stopped importing petrol because of the debt.

PUNCH.

with this development fuel subsidy should be remove oooooooooooo. we are sick and tired of scarcity of fuel in this country at least sure-p and other fraud program under former GEJ government is been suspended. fuel subsidy should be remove oooooo.

Johnnyessence:
with this development fuel subsidy should be remove oooooooooooo. we are sick and tired of scarcity of fuel in this country at least sure-p and other fraud program under former GEJ government is been suspended. fuel subsidy should be remove oooooo.

if u like, shout frm now till eternity no 1 will hear. So, jst shut yo mouth

God go punish buhari if he dare remove subsidy. I thought he never knew what subsidy is? why remove something that doesnt exist? illiterate president, zombie, brainless major general.

Mek una remove the subsidy nah...........anywhere check my signature for free salary

Ur talkn to a President dat went to france to get paris weed for his cows .. Damn i heard paris weed helps improve milk quality.

There's notin as subsidy. so, i dont know who's urging the president to remove sometin that doesnt exist... The president shud rather fight corruption in petroleum sector.

Remove the fvcking "subsidy" already then.

tobillionaire:
if u like, shout frm now till eternity no 1 will hear. So, jst shut yo mouth

i won't shut my mouth until something is done fast we can't afford to be suffering from fuel scarcity GEJ start this menace since 3 yrs ago and should be stopped ooo.

I support the total removal of PMS subsidy.

GMB should please remove fuel subsidy fg can't afford to add 521b naira to the 2016 budget in the name of paying fuel subsidy .

biko remove the subsidy.

it's 6 month of GMB administration in government i implore all the government officials that's working for him should remove fuel subsidy ooooo.

d appropriate thing is 4 d subsidy to be removed at dis critical time, bt I believe it shouldn't be at d expense of d masses: if d right things are done petroleum products can sell at lower prices than d current prices even after subsidy must av been removed, u ask why? Fuel sells in certain countries without oil at much cheaper prices than it is sold in Nigeria or did Y'ardua increase subsidy wen he fixed petrol price at #70 nd Kerosene @ 50? so what happened after then?

if that is the case they should remove subsidy then.

APC SCAM

IbokUtoroh:
God go punish buhari if he dare remove subsidy.
I thought he never knew what subsidy is?
why remove something that doesnt exist?
illiterate president, zombie, brainless major general.

But God is already punishing your generations na. What are you doing about your generational suffering?

If this is the case, then I don't know wtf we're doing with the subsidy!

simpleseyi:



But God is already punishing your generations na. What are you doing about your generational suffering?

I will ignore u for now.
next time u won't escape my wrath n okpoyonyo.

simpleseyi:



But God is already punishing your generations na. What are you doing about your generational suffering?

I will ignore u for now.
next time u won't escape my wrath n okpoyonyo.
gerrahahere pig!

I thought they said there's nothing like subsidy. I thought someone said a litre of fuel should cost 40 naira per litre even without subsidy.

Bunch of scammers!

IbokUtoroh:
God go punish buhari if he dare remove subsidy.
I thought he never knew what subsidy is?
why remove something that doesnt exist?
illiterate president, zombie, brainless major general.

I hope your mannerlessness actually gives you peace. By the way, if PMB doesnt know what subsidy is, isn't that a good reason why he shouldn't be paying it?

obailala:
I hope your mannerlessness actually gives you peace. By the way, if PMB doesnt know what subsidy is, isn't that a good reason why he shouldn't be paying it?

exactly, he shudnt be paying it but he just sent a bill to the nass for wat his brains cant fathom its meaning. this una president needs serious medical examination, he could be psychotic or a real maniac.

But please o, what is the government still subsidising? When a barrel sold for above $100 it was understandable but a barrel goes for between $40 and $48 according to the article, so why is subsidy still in contention? Someone enlighten me pls

IbokUtoroh:
exactly, he shudnt be paying it but he just sent a bill to the nass for wat his brains cant fathom its meaning. this una president needs serious medical examination, he could be psychotic or a real maniac.

Are you opposing for opposing sake or are you opposing just so you have an opportunity to throw insults?... For how long can you possibly continue to remain in this condition?.... In a democracy, everyone cannot be pleased at the same time, some people want one candidate, others want another candidate. At the end, only one candidate wins an election. In life you win some and you lose some.

I understand you are pained that a candidate you hated won the election but for how long will you continue to act like an abandoned lover with a broken heart?... If you want to oppose, why dont you do it sensibly?... You apparently dont want the FG to pay subsidies owed the marketers so the fuel scarcity would continue, you obviously wish your fellow Nigerians to suffer so you get a chance to say 'you were right.' But what sort of devilish reasoning is that?... Are you aware that no matter how you keep hating or praying for evil to befall Nigeria, any evil that befalls Nigeria would also be suffered by both you and your loved ones even while the man you hate still remains the president till at least 2019 ?

Ok

obailala:
Are you opposing for opposing sake or are you opposing just so you have an opportunity to throw insults?... For how long can you possibly continue to remain in this condition?.... In a democracy, everyone cannot be pleased at the same time, some people want one candidate, others want another candidate. At the end, only one candidate wins an election. I understand you are pained that a candidate you hated won the election but for how long will you continue to act like an abandoned lover with a broken heart?...

bros am from akwaibom, pdp won in akwaibom, the closest sphere I can feel d presence of governance na state considering how local govt is being run in naija, n to be frank am in my state. my govr is working. so if u see me oppose anything, I dont just do it for the fun but for the betterment of my fellow people who r not opportuned to be in their states n r looking up to the central govt for succor.
and for the last time, buhari cant remove subsidy cos we will oppose it just like some fools did back in 2012.
its as simple as dat, so if u gat probs with dat, drink otapiapia.

IbokUtoroh:









bros am from akwaibom, pdp won in akwaibom, the closest sphere I can feel d presence of governance na state considering how local govt is being run in naija, n to be frank am in my state. my govr is working. so if u see me oppose anything, I dont just do it for the fun but for the betterment of my fellow people who r not opportuned to be in their states n r looking up to the central govt for succor.
and for the last time, buhari cant remove subsidy cos we will oppose it just like some fools did back in 2012.
its as simple as dat, so if u gat probs with dat, drink otapiapia.

Feel free and please yourself.. but if I may ask, what is this big space you keep leaving whenever you type messages?.... Is that part of your own opposition?

obailala:
Feel free and please yourself.. but if I may ask, what is this big space you keep leaving whenever you type messages?.... Is that part of your own opposition?

andriod n java no be mate.

IbokUtoroh:









bros am from akwaibom, pdp won in akwaibom, the closest sphere I can feel d presence of governance na state considering how local govt is being run in naija, n to be frank am in my state. my govr is working. so if u see me oppose anything, I dont just do it for the fun but for the betterment of my fellow people who r not opportuned to be in their states n r looking up to the central govt for succor.
and for the last time, buhari cant remove subsidy cos we will oppose it just like some fools did back in 2012.
its as simple as dat, so if u gat probs with dat, drink otapiapia.

Good thinking good product!!

Am from Rivers, and we have been on the receiving end of this subsidy. I bought a litre of fuel few minutes ago in black market for N200 per litre. We advocated a total deregulation but some people' occupied Ojota' and Abuja wishing that hell should fall because of the removal of fuel subsidies. Today they are now advocating for the same thing we all wanted 3yrs ago.
This is a high level of hypocrisy.!
To me,you simply can't eat your cake and have it.

Since they wanted subsidies to remain, so be it!

This GEJ sef!

I will for ever remember you!

saintopus:


Good thinking good product!!

Am from Rivers, and we have been on the receiving end of this subsidy. I bought a litre of fuel few minutes ago in black market for N200 per litre. We advocated a total deregulation but some people' occupied Ojota' and Abuja wishing that hell should fall because of the removal of fuel subsidies. Today they are now advocating for the same thing we all wanted 3yrs ago.
This is a high level of hypocrisy.!
To me,you simply can't eat your cake and have it.

Since they wanted subsidies to remain, so be it!

This GEJ sef!

I will for ever remember you!

abeg help me tell em.

I know this will be Baba's plan.Won't be surprise been told no subsidy next year and NNPC will be the sole importer of the finished product.Like that.