The Independent Petroleum Marketers Association of Nigeria (IPMAN) has urged the Federal Government to remove subsidies on petrol products.
In an interview with the News Agency of Nigeria (NAN) in Lagos, the association’s National Operations Controller, Mr Mike Osatuyi, said the removal of subsidies will increase the sector’s contribution to the nation’s economy.
Osatuyi said that the petrol subsidy significantly consumed revenues that should have been available to fund the 2021 budget.
He noted that President Buhari had identified the problem of poor performance of oil revenue in the 2021 budget.
The president had attributed the poor performance to a shortfall in production as well as significant cost recovery by the Nigerian National Petroleum Corporation (NNPC) to cover the shortfall between its cost of importing petrol and the pump price.
According to Osatuyi, “The president has identified the problem and the solution is to remove the subsidy.”
He, however, noted that before proceeding with the policy, the government should provide alternatives to Nigerians in order not to increase inflation in the country as he explained the urgency to switch massively to gas utilisation in the country as it has over 200TCF of proven reserves of natural gas.
The controller also urged the government to focus on the implementation of the autogas scheme and engage in the distribution of free cooking gas cylinders as they would help cushion the effects of the full deregulation of the downstream sector.
He also called for the reduction in the cost of governance to reduce borrowing to fund parts of the budget annually.
“if as a government your total revenue is N8 trillion and you are preparing a budget of N13 trillion, it means you will have to borrow to fund the budget.
“You can decide to reduce the cost of governance and block revenue leakages so that you don’t need to borrow to fund your budget,” he stated. (NAN)
