Managing director, Petroleum Products Marketing Company (PPMC), Mr Isiyaku Abdullahi, has said full deregulation of the petroleum downstream sector will save Nigeria N12 trillion in four years.
Abdullahi disclosed this at the ongoing 15th Oil Trading and Logistics (OTL) Africa Petroleum Downstream Week 2021 yesterday in Lagos.
The conference had as its theme, “Nigerian Downstream Oil and Gas Sector in Transition: Getting Set.”
He 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 added that the savings made from the removal of subsidy on petrol could be channelled to other critical areas such as infrastructure, health care and education.
He noted that the removal of subsidy would make the price of petroleum products in Nigeria at par with its African neighbours and discourage smuggling.
According to him, 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.
Similarly, Mr Adeyemi Adetunji, group executive director, downstream, Nigerian National Petroleum Corporation (NNPC), maintained that prices of petroleum products would be determined by the free market under the PIA.
He said: “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.
“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.”
On his part, Dr. Muda Yusuf, a former director general of the Lagos Chamber of Commerce and Industry (LCCI), said the government needs to demonstrate political will to end the subsidy regime.
Yusuf, who is the chief executive officer, Centre for the Promotion of Private Enterprise, said the inability to fully deregulate the sector was a major impediment to unlocking its huge investment potential in the past five decades.”NAN