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FG: Nigeria Risks Chaos if Petrol Subsidy is Removed

todayJuly 5, 2022

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•Claims, ‘We are leaving the country much more secure than we met it’

•NMDPRA expresses concern over growing oil theft

Emmanuel Addeh in Abuja

The federal government, yesterday, maintained that removing petrol subsidy would result in unintended consequences, insisting that this is a most inauspicious time to withdraw the price buffer.

Minister of Information and Culture, Mr. Lai Mohammed, told Reuters that many other nations were introducing measures to help citizens cope with high oil energy prices. Mohammed said Nigeria could not be an exception.

Despite the daily killings and attacks across the country, the minister said, “We are leaving the country much more secure than we met it,” noting progress made against Boko Haram since 2015.

Meanwhile, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) expressed worry over the rising incidents of vandalism and theft along the key pipeline conveying refined petroleum products to Mosimi, Ibadan, Ore, and Ilorin fuel depots. Chief Executive of NMDPRA, Farouk Ahmed, said this when the top executives of the South-west Independent Petroleum Marketers Association of Nigeria (IPMAN) visited him in Abuja.

Mohammed’s position on petrol subsidy aligned with that of President Muhammadu Buhari, who recently chided the West for demanding the removal of what the government termed under-recovery while they continued to seek new ways to relieve their own citizens of the effect of the harsh global economy.

Nigeria is Africa’s largest oil exporter, but still has to import almost all its fuel needs due to lack of refining capacity. The country recently scrapped plans to abolish fuel subsidies earlier this year, a move that raised concerns with the International Monetary Fund (IMF).

“When you consider the chaos, the social disharmony and … instability such an action (abolishing subsidies) would facilitate, is it worth it? I don’t think so,” Mohammed said in a wide-ranging interview with the news medium.

Nigeria suffers intermittent fuel shortages and has raised its deficit forecast twice this year and increased borrowing to cover the cost of the subsidy.

The country’s petroleum production has also fallen short of government targets, with $1 billion in revenue lost to crude oil theft in the first quarter of this year, according to the sector regulator.

Mohammed said a new industry law that allocates money to oil-producing communities would stop attacks and blamed the European Union’s climate change policies for stifling investment in the sector.

“We believe that climate change is real and important for emission control, but there is a bit of double standard in the EU policy regarding climate change,” he said.

Alongside attacks on the oil infrastructure, much of Nigeria’s north is wracked by violence committed by so-called “bandits,” while dozens were killed in church attacks in the northern state of Kaduna and the South-west state of Ondo last month.

Notwithstanding the killings and attacks across the country almost on a daily basis, Mohammed said the current federal administration was “leaving the country much more secure than we met it” at the inception of the government in 2015.

He reiterated the Buhari government’s call on Western countries to declare the Indigenous People of Biafra (IPOB), which campaigns for secession of part of South-east Nigeria, a terrorist group.

Asked if Nigerian security forces had killed any innocent people in the country’s South-east during its campaign against IPOB, Mohammed said, “Not deliberately.”

Mohammed said he would demand the return of hundreds of priceless sculptures, known as the Benin Bronzes, when he meets with the director of the British Museum later on Monday, after Germany returned the first two of more than 1,100 of such sculptures last week.

“I will be telling them that time is running out to return our stolen artefacts,” he said.

The minister added that he did not expect a result immediately, stressing, “it’s about when, it’s not if.”

Mohammed’s comments came as NMDPRA voiced concern that incidents of vandalism and theft were rising along the main pipeline delivering refined petroleum products to Mosimi, Ibadan, Ore, and Ilorin fuel depots.

The 2B pipeline network pumps petroleum products from the Atlas Cove depot in Lagos Island through the depots in Ejigbo in Lagos Mainland, to Mosimi in Ogun State, Ibadan in Oyo State, Ore in Ondo State, and Ilorin in Kwara State.

The NMDPRA chief executive said the series of theft and vandalism had led to huge revenue losses for the government.

Speaking when the top executives of the South-west IPMAN visited him in Abuja, Ahmed described the association as a critical stakeholder in the petroleum sector.

He added that the industry regulatory authority had received complaints about private petroleum products depots selling Premium Motor Spirit (PMS), popularly called petrol, above the approved price of N165 per litre.

Ahmed said the illegal price increment had disrupted the smooth operation of the entire fuel distribution and supply value chain, leading to higher prices in some areas.

He urged the association to report any fuel depot selling products to its members above the approved ex-depot prices by the government.

In his remarks, the zonal chairman of IPMAN in the South-west, Dele Lamidi, said the executive committee visited NMDPRA to seek its collaboration and support, in line with the provisions of the Petroleum Industry Act (PIA), 2021.

Lamidi listed some of the challenges faced by IPMAN to include products sharing difficulties, rise in penalties, difficulties in getting tax clearance from the Federal Inland Revenue Service (FIRS), as well as the high cost of doing business in the country.

He pledged the continuous support of the group to the federal government by ensuring that petrol was available at the regulated retail price of N165 per litre at retail outlets across the country.

Lamidi stated, “As far as we are concerned in the South-west, we have gone beyond embarking on strikes. Strike is not the solution to any problem, because if there is a strike, it affects the masses and our businesses.

“We will work together with the authority to ensure free flow of petroleum products and also make sure that products are sold at the government-regulated retail price, if we get them at the normal price.”

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