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Experts, labor and non-governmental organizations, NGOs, on Thursday disagreed over the full deregulation proposed by governors of gasoline prices in Nigeria.
At their virtual meeting on Wednesday, the governors considered the report of a committee headed by Kaduna State Governor Mallam Nasir el-Rufai and accepted his recommendation for a complete deregulation of the price of gasoline, which has increased mainly due to the relatively high price. of crude oil on the world market.
The forum, which set the pump price of the product at 385 naira per liter, also recommended that the federal government purchase 113 buses to cushion the effects of the price increase.
But in various talks with Vanguard yesterday, pundits, unions and NGOs expressed divergent views on the matter.
Deregulation is essential for growth
For example, the President of the Major Oil Marketers Association of Nigeria, MOMAN, Tunji Oyebanji, said: “We said it and it has always been a problem. Like the many problems in the country, if we don’t the will to do something at the right time, the situation will eventually impose itself on us, that’s what happened to us right now.
“I won’t say it’s good or bad. We are all citizens of Nigeria and that is where we are at the moment.
“The governor’s realization that the current situation is not sustainable is a welcome development. However, this desire must be translated into action. We are awaiting further reactions from the government on the matter, remember the government says that ‘He is still in discussion with workers who oppose deregulation today.
“So, for now, we take the governor’s statement as just recognition and a wish until the policy measures are legally put in place.
“On labor, I will only say that they have taken this position for the past 25 years and that it is high time they took a different path. The country can no longer afford the subsidy. not removed, many states that depend on the federal government The allowance could soon collapse, with many workers losing their jobs.
“So they have to rethink. They were also against the privatization of the refineries, now they are complaining that the refineries are not functioning. So sometimes what is popular is not always economically viable and sustainable.
“When it comes to the benefits of deregulation, we have said it over and over again and there is no need to repeat it. In any case, it is no longer a question of choice but an imperative of survival. If you have any doubts, let’s wait and see what happens. if we continue as we go. “
Regarding the plight of Nigerians, he said: “We should adjust our way of life. For the individual, when there are changes we should adjust. For Nigerians, we like to enjoy without rational thought. When people say we will suffer, yes it will. happen if we don’t change our spending habits. “
Regarding the benefits, Mr. Oyebanji explained that a complete deregulation of the downstream sector would put Nigeria ahead of other African economies in refining local petroleum products compared to exporting crude oil for refining.
He listed other benefits to be expected from the process such as;
He added: “Others are the growth of local refining capacity, leading Nigeria to become a net exporter of refined oil to West and Central Africa, and meeting local and regional demands and saving money. In Nigeria an increase in foreign exchange, a win-win situation for the Nigerian consumer, industry players and the country, the importation of PMS by traders can resume, freeing the federal government from the unsustainable cost and the ‘increased debt burden associated with a regulated pricing system. “
No deregulation without GDP becoming an act – Iledare
For Professor Wumi Iledare, Ghana National Petroleum Corporation, Professor and GNPC Chair in Petroleum Economics and Management, Institute for Oil and Gas Studies, Cape Coast, Ghana, oil industry law, with GDP becoming law. Another populist president can always come back and forth using PA1969 as amended.
“Meanwhile, this is pragmatic as we wait for the implementation of the GDP. Partial and progressive decontrol will soften the shock on the Nigerian economy.
“Going from 162 to 385 per liter can create an imbalance beyond the sharp rise in the exchange rate. So let’s let NNPC continue at a lower price only at NNPC gas stations for public transport only with a sunset. of course, this presupposes integrity to avoid back and forth!
“The simple act of stepping outside the box, far from my habit of what should be!” 385 remains competitively priced, judging by the border countries. Decentralization of the product market is also important.
“Honestly, I don’t seem to know what to say. I have read the press release but what needs to be evaluated is the technical report that supports the press release. Something like deregulation cannot be drastic but gradual and partial on a period of time!
“I am also shocked that the motive is to engage the federation account. It causes problems because it should be more money to share.”
Deregulation in line with the oil market
For example, a Port Harcourt-based energy analyst Dr Bala Zaka said: “With the rise in the price of oil, it would now cost more to source and refine crude oil, which means the cost would be shifted Nigeria as a nation now imports all of its essence from the world market. This seems to justify the need for total deregulation. “
However, the Association of Petroleum and Natural Gas Executives of Nigeria, PENGASSAN, asked how the Governors Forum arrived at N385 per liter as the pump price for gasoline.
PENGASSAN General Secretary Comrade Lumumba Okugbawa told Vanguard in a telephone interview that the number made no sense and would never fly.
Comrade Okugbawa said that while the union supports the federal government’s plan to deregulate the price of gasoline, such a policy should not be driven by imports.
He said, “The big question is how the governors came up with this price? Do they know the cost of landing, the margins of the traders and all the other elements of the pricing model.
“As for PENGASSAN, we have always said that while we support deregulation, it must be deregulation that must not be driven by imports. It must be locally based.
“It’s because everything that is driven by imports, we don’t have control. Especially in terms of exchange rates and fluctuations in the international price of crude oil.
“The best deregulation therefore is to base policy on local refining and processing.”
He noted that refining in the country would create jobs and increase the value derived from crude oil from Nigeria.
He described the governors’ position as ill-advised, saying it will not fly.
He stressed that such an increase in the price at the pump would lead to hyper-inflation in the country.
He added that only the Petroleum Price Regulatory Agency, PPPRA, has the mandate to determine the price of gasoline in the country and should be allowed to do its job.
Also speaking to Vanguard on the matter, the national coordinator of Publish What You Pay Nigeria, PWYP, Mr. Peter Egbule also asked how the governors arrived at this figure.
Egbule said: “If the subsidy is paid, the market should determine the price, not the governors. Their calculation is questionable.”
“You cannot on the one hand say that you are removing the subsidies and, on the other hand, that you set the price. The government must be clear on the policy it wants to pursue.”
He added: “I’m not sure what model they used to come up with that price. Is it a price that will stay or is it a price based on the prevailing indices.”
He described the governors’ stance as rushed, saying the government must be open about what it is doing to implement the policy.
“If the subsidy goes, the government has to tell us what it is replacing it with,” Egbule said.
No deregulation without GDP becoming an act – Iledare
Nonetheless, Professor Wumi Iledare, Ghana National Petroleum Corporation, Professor and GNPC Chair in Petroleum Economics and Management, Institute for Oil and Gas Studies, Cape Coast, Ghana, said: “There can be no having deregulation without GDP becoming law Another populist president can always come back and come back using PA1969 as amended.
Specifically, he said: “Meanwhile, this is pragmatic as we wait for the implementation of the GDP. Partial and progressive decontrol will soften the shock on the Nigerian economy.
“Going from 162 to 385 per liter can create an imbalance beyond the sharp rise in the exchange rate. So let’s let NNPC continue at a lower price only at NNPC gas stations for public transport only with a sunset. of course, this presupposes integrity to avoid back and forth!
“The simple act of stepping outside the box, far from my habit of what should be!” 385 remains competitively priced, judging by the border countries. Decentralization of the product market is also important.
“Honestly, I don’t seem to know what to say. I have read the press release but what needs to be evaluated is the technical report that supports the press release. Something like deregulation cannot be drastic but gradual and partial on a period of time. I’m also shocked that the motive is to engage the federation account. It gets in trouble because it should be more money to share. “
