The total stoppage of fuel subsidy by the government will save Nigeria ₦12 trillion in four years, says Managing Director, Petroleum Products Marketing Company (PPMC), Mr Isiyaku Abdullahi.
Abdullahi in his submission suggests that government can channel savings made from the removal of subsidies on more demanding areas such as infrastructure, health care and education.
Naija News reports that the PPMC MD made the observation on Wednesday while speaking at the ongoing 15th Oil Trading and Logistics (OTL) Africa Petroleum Downstream Week 2021 held in Lagos.
Speaking at the conference which had its theme as “Nigerian Downstream Oil and Gas Sector in Transition: Getting Set”, Abdullahi said: “At 80 dollars crude oil, 60 million litres daily consumption and N411 to a dollar foreign exchange, Premium Motor Spirit (PMS) under-recovery (petrol subsidy) per litre will be N138 per litre.
“Daily PMS under-recovery will be N8.3 billion. Annual PMS under-recovery will escalate to three million naira.”
Abdullahi insists that deregulation would make the price of petroleum products in Nigeria at par with its African neighbours and discourage smuggling.
He was optimistic that with the signing of the Petroleum Industry Act (PIA), the country is moving towards full deregulation of the downstream sector which will attract more investments.
On his part, Mr Adeyemi Adetunji, group executive director, downstream, Nigerian National Petroleum Corporation (NNPC), said that prices of petroleum products would be determined by the free market under the PIA.
“The PIA has provided an enabling environment to attract investment, ensure fair competition for operators and fair price for consumers and producers to ensure industry stability.”
He added: “The fuels market is expanding in view of the emerging gas opportunities. Investors and existing players should seize these opportunities to create value for all stakeholders.”
Playing support to deregulation of the petroleum sector, Dr Muda Yusuf, a former director-general of the Lagos Chamber of Commerce and Industry (LCCI), said the government’s inability to fully deregulate the sector was a major impediment to unlocking its huge investment potential in the past five decades.