By Adewale Sanyaolu
The Nigerian economy is losing 18 million litres of petrol to cross-border smuggling on a daily basis, former Chairman, Society of Petroleum Engineers, Nigerian Council, Mr Joe Uwakwe, has declared.
Uwakwe disclosed this at a webinar organised yesterday by the Major Energies Marketers Association of Nigeria (MEMAN) titled ‘‘Optimising the Nigerian Oil and Gas Industry’’.
These numbers, according to him, are a product of research findings carried out over a period of time.
The former SPE boss declared that subsidy at the fuel pumps has failed, adding that if the country continues to subsidise, there will be continued leakages, which aren’t supportive of the fragile economy.
He explained that the subsidy at the fuel pumps ends up serving the interests of our brothers and sisters across the neighbouring West African coast.
“If we continue to subside, we will continue to have leakages, and those leakages are not small. If you run those numbers, that is what you get and that is so wasteful. There is a need to communicate the message to Nigerians, that, even though the subsidy intervention is meant to serve Nigerians but unfortunately it is serving everyone in neighbouring countries.
“I am not saying subsidy is not good. But what I am saying is that the current subsidy regime is not working and must be reformed,’’ he stated.
Again, he said, the implementation of subsidy policy for petrol must be fair added and given and must not be done in a way that it will adversely or otherwise influence the investment decisions of other products.
On what best serves the interest of consumers, Uwakwe posited that a fair pricing template established through competition driven by an active, informed, independent and engaging regulator which places the consumer at the heart of regulation remained critical to the success of the industry.
The former SPE Chairman explained that, to achieve to fair pricing, there must be diverse sources of petroleum products which allows multiple parties to bring in the products either through imports of locally, insisting that a single supplier of petroleum product isn’t good for the industry.
He lamented that the bulk of the challenges plaguing the oil and gas industry are basically policy issues, saying the Ministry of Petroleum Resources and its regulators must come together to iron out some of the issues in order to align government policies
He pointed out that at all times, there would be conflicting objectives, saying part of that collaboration would be to prioritise those objectives and establish what should be pursued at any specific point in time to achieve the overall goal
Again, he said the implementation of subsidy policy for petrol must be fair added and given and must not be done in a way that it will adversely or otherwise influence the investment decisions of other products because that is what must happen for the market to develop properly.
Also speaking, former Chairman of MEMAN and Managing Director of 11 Plc, formerly Mobil Oil Plc, Mr Tunji Oyebanji, stressed the need for stakeholders to resolve industry disputes internally, rather than the use of press statements.
He called for an end to public disagreements, particularly those between the NNPCL, regulators, and Dangote, replacing such formalised platform for dialogue.
“The MEMAN is working closely with other stakeholders to consolidate discussions and ensure we collectively move the industry forward,” Oyebanji added.
