••••ECONOMY
FOLLOWING fears that Nigeria may have returned to the era of petrol subsidy payment, theFederal Government has been accused of lacking policy clarity in the deregulation of the downstream sector of the petroleum industry.
The immediate past Chairman of the Society of Petroleum Engineers, SPE Council Nigeria, Engr. Joe Nwakwue, in a chat with Vanguard yesterday, said Nigeria needs to urgently implement a full deregulation of the sector.
Following the rise in crude oil price to $56 per barrel last week, the landing cost of premium motor spirit (petrol) has also risen from N143.60 per litre in December to N158.53 per litre.
Additional costs in throughput, wholesaler’s margin, storage, administration, transportation, bridging, and retailers’ margin bring price at pump to about N181.69 per litre. Petrol is presently sold at N163 per litre which leaves a difference of N18 per litre.
There is no provision in the 2021 budget for subsidy payment but the Nigerian National Petroleum Corporation, NNPC, has in the past termed previous differentials as under-recovery and absorbed them as part of its cost of operation.
The situation has left Nwakwue unsatisfied and he has warned the government against going back to subsidy regime.
According to him, “there is one major challenge in the downstream presently and that is lack of policy clarity. It is not clear to me what the policy is and I am yet to see a strategy or plan for subsidy removal.”
