The Independent Petroleum Marketers Association of Nigeria (IPMAN) has urged the federal government to reconsider its decision not to restore fuel subsidies, citing the example of Kenya, which recently restored the subsidy after experiencing economic hardship.
On Tuesday, the federal government denied claims that it was planning to reinstate fuel subsidies to help Nigerians cope with rising fuel prices.
However, IPMAN argued that Nigeria is in a similar situation to Kenya, particularly given the continued depreciation of the naira on the foreign exchange market.
“When he [President Tinubu] announced that thing [subsidy removal], we said it was going to bring problems. Are we not feeling the consequences of that announcement now? It is forex that largely determines the cost of petroleum products here,” said Mohammed Shuaibu, Secretary of IPMAN.
IPMAN spokesperson Chinedu Ukadike warned on Sunday that if the country’s forex crisis does not improve quickly, the price of petrol might rise to N750 per litre.
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Ukadike had said that NNPCL remained the major importer of the product, despite the deregulation of the Nigerian oil market, because oil marketers do not have access to forex from the CBN Importers and Exporters window to purchase the product.
Mr Shuaibu repeated this view in a statement on Tuesday, saying that given the current challenges, oil marketers are unwilling to import the product again.
“So, if the government is going to relax the removal of subsidy for a while, it should better do that as a matter of urgency,” he said.
Furthermore, Mr Shuaibu pointed out that the Nigerian National Petroleum Corporation Limited (NNPC) assurance that it will not increase the pump price of petrol again was not feasible.
He explained that if the naira continues to fall in value against the dollar, NNPCL will have no choice but to raise its pump price.
“Relaxing subsidy removal is going to be a very wise decision right now, because going by the price of the dollar, the cost of petrol is bound to rise. In fact, some oil marketers are ready to join the labour union to protest,” he added.
