In a significant development for Nigeria's downstream oil sector, operators have revealed that the Federal Government has successfully saved approximately ₦400 billion since the removal of subsidy on Premium Motor Spirit (PMS). The removal of the subsidy has been met with mixed reactions from industry stakeholders.
Chinedu Okonkwo, the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), expressed concerns over the substantial loss of government revenue due to the subsidy.
Nonetheless, he acknowledged that the removal of subsidy has resulted in substantial savings for the federal government, amounting to billions of naira, a significant relief for taxpayers.
Emphasising the need for self-reliance in the petroleum industry, Okonkwo disclosed that petroleum marketers have initiated discussions to independently import petroleum products. He stated, "We are currently engaged in meetings with various interested parties who are keen on commencing PMS imports. We remain determined and proactive in pursuing this goal."
While Okonkwo acknowledged that the price of petrol would be influenced by foreign exchange rates, he argued that the removal of subsidy would not solely lead to an incessant increase in the cost of PMS. He highlighted the crucial role of managing Nigeria's crude oil reserves, which serve as a foreign exchange earner.
Okonkwo suggested that as Nigeria begins to meet its OPEC quota and enhance other avenues for generating foreign exchange, the value of the naira would strengthen, ultimately resulting in more affordable fuel prices. He said, "The floating of the naira is a positive step, as it allows for wider access to foreign currency at market rates, rather than relying solely on personal connections to obtain dollars at the official rate."
Likewise, Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), echoed Okonkwo's opinion regarding the impact of exchange rates on petrol prices. Gillis-Harry reaffirmed PETROAN's commitment to facilitating the approval of import licenses for petrol. Additionally, ongoing discussions with the government are focused on devising effective strategies to rehabilitate and optimise the country's refineries.