Fuel subsidy killing Nigeria’s economy
.Energy sector in comatose, oil companies, multinationals closing shops
.Deregulation is the way out -Says MOMAN
By Udeme Clement
If the Federal Government does not take proactive steps urgently to revamp the energy sector that is already in comatose, this sector, which is crucial to the growth of Nigeria’s economy, may decline until nothing is left for the future.
It is common knowledge that the energy sector, which is important to economic growth of a country with over 180million population, has suffered serious setback due to harsh operating environment, as well as government policies. This is happening notwithstanding the fact that government depends largely on revenue from oil to run the economy.
At present, many local oil companies, depot operators, even multinationals are closing shops in Nigeria, due to unfavourable fiscal policies, making it extremely difficult to improve their margin, in order to stay afloat in business.
Some of the impeding factors include inability to fully deregulate the sector for businesses to thieve and huge outstanding subsidy debt government is owing Major Oil Marketers, which could worsen the crisis already brewing in the industry, if not pragmatically addressed.
Our investigation revealed that the debt overhang is taking its toll on Major Oil companies, as they are currently suffering cash crunch and unable to make new investments to create jobs in the industry.
Stakeholders are of the opinion that fuel subsidy is killing Nigeria’s economy, as a whooping sum government is paying in subsidizing petrol ought to be used in education sector, healthcare services and infrastructure development to create enabling environment for sustainable growth.
At a press conference yesterday, the new Chairman, Major Oil Marketers Association of Nigeria, MOMAN, Mr. Adetunji Oyebanji, said, “I am coming at a time the industry is not growing but rather declining. So, we have to do the needful in bringing the industry on stream”.
He went on, “We would like to see the industry that is fully deregulated to enhance increase in local refining capacity. Good decisions should be taken on what to do with the existing refineries because they are not performing optimally. Let Nigeria become a hub in the whole Africa with flow of investments in the downstream petroleum sector. This requires good planning for the future. For example, let us also look at renewable sources like ethanol, solar and many others”.
Oyebanji pointed out, “Most importantly, there must be deliberate government policies to encourage and support growth of the industry.
MOMAN members are ready to work with government in giving their expertise on how to drive the industry efficiently. Our members are innovative and highly skilled in the business because they worked in different countries outside Nigeria.
“So, MOMAN is willing to bring this technical-know-how to bear in moving the industry forward for greater growth”.
In his remarks, the Chief Executive Officer of MOMAN, Mr. Clement Isong, emphasized, “Full deregulation is the way out. Subsidy is not good for Nigeria’s economy. Reforms are required to rejuvenate the industry for tangible growth. MOMAN is ready to work with government to achieve more sustainable regime for better growth and development”.
This is segment-One report. Watch out for the next segment of our report on reforms needed to rejuvenate the energy sector for greater productivity: