April 16, 2024

Subsidy: MOMAN hails FG’s short-term intervention, says it must be time-bound

Oredola Adeola

 

The Major Oil Marketers Association of Nigeria has cautioned the Nigerian government’s decision to partially return the subsidy to curtail the rising price of Premium Motor Spirit (petrol), insisting that the short-term intervention must be targeted, affordable, well thought out, and time-bound and should not negatively impact the Nigerian economy in the long run. 

 

Clement Isong, Chief Executive Officer, and Executive Secretary made this known in his presentation speaking on the theme” Energy transition, PIA, Petroleum pricing, and the way forward in the downstream sector” during the annual Nigeria Association of Energy Correspondents (NAEC) International Strategic Conference 2023 on Thursday in Lagos.

 

 

According to him, MOMAN supports short-term interventions in the prices of imported petroleum products, provided they are time-bound and targeted. However, the intervention should not hurt the Nigerian economy in the long run.

 

 

He said, “Subsidy is bad, intervention to help consumers transit is good.”

 

Isong further stated that the deregulation of the downstream sector of the petroleum industry has attracted investment into the value chain. He however cautioned that the pace of investment would increase substantially if the commodity pricing were right and economical for investors.

 

He said, “Deregulations are meant to enable people and businesses, therefore there is a need for the right decisions to be made based on the resources available. When the commodity pricing is right this would serve as a confidence booster for the sector.

 

“If spending goes down, the industry should reduce its costs, people should consider the use of alternative energies available.

 

The MOMAN ES further revealed that petrol prices will continue to increase based on market dynamics and the cost of crude oil. He added that the increase in prices will force petroleum product consumers to be more efficient in their energy usage and choices of fuel type.

 

He noted that fuel consumers are now transitioning from diesel-powered generators and diesel-powered modes of transportation to Compressed Natural Gas (CNG).

 

“The rise in diesel costs should help the average consumer move away from diesel-powered generators and diesel-powered modes of transportation- rather than subsidize.”

 

He said, “The rising price is a tough situation but an inevitable reality.

 

“The vision of the downstream is to move away from cheap petrol, expensive diesel, and alternative energies, move to mass transit, and be more cost-efficient,” Isong noted.