Nigeria: Awaiting Follow-Up Actions to Cushion PMs Deregulation

14 October 2020

Though we fully support the removal of subsidy on the downstream petroleum products (particularly premium motor spirit, petrol), the Muhammadu Buhari administration will still take the blame for bringing it on at a most inauspicious time when Nigerians were still struggling to survive both the medical and economic effects of the coronavirus pandemic.

Deregulation should have been a clear government policy with a systematic implementation schedule. It should have been accompanied with the necessary actions to cushion the effects of subsidy removal on the citizenry.

But because the regime chose to politicise the issue even before assuming power in 2015, it was forced to carry the burden at great public expense until the pandemic rendered subsidy payments totally untenable.

This typical unpatriotic politicisation and lack of clear focus of leadership are part of the reasons that Nigeria has deteriorated into a near-failed state.

If deregulation had been properly handled, the promised conversion of petrol engines to gas would have started in the early life of this administration when the first effort to withdraw subsidy was made in 2017.

Also, by now, the many licences issued to prospective private refinery projects should have been encouraged to come on stream and save Nigerians from dependence on fuel imports.

We call on the Federal Government to quickly move and implement the petrol-to-gas conversion policy which the Minister of State for Petroleum Resources, Mr. Timipre Sylva, unveiled when the tariff on electricity and total withdrawal of government involvement in petroleum product pricing were recently announced.

On September 14, 2020, Sylva promised that as from this month (October 2020) an aggressive programme of conversion of generators and automotive fuel tanks to gas powering would commence, and at no cost to Nigerians. Nigerians would then be free to choose whether to go on petrol or natural gas.

So far, nothing concrete has been seen in that direction. Definitely, gas is clear and capable of reducing costs by up to a quarter of what petrol consumption takes. Engines fuelled with gas could reduce costs from the current N162 per litre to N120, which is lower than the last subsidised cost of PMS per litre.

But it will almost be impossible to leave ordinary Nigerians to make the switchover without government leading the effort as promised.

For the switchover to be effective, it must make gas refuelling safe, easy, cost-effective and readily available even in the rural areas.

We hold the Federal Government fully accountable for the implementation of these follow-up programmes to cushion the bruising effects of the downstream deregulation of the petroleum sector. A situation where government will abandon the people to their fate after imposing these burdens on them at the height of this pandemic will not be tolerated.


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