The stakeholders in the oil and gas sector have speculated possible removal of the petroleum subsidy by the president-elect, Gen. Mohammed Buhari, after his assumption of office in May 29, 2015.
This according to them is credited to body language and some of the speeches expressed by him, during his campaign tour before the March 28 Presidential poll.
The stakeholders noted that on many occasions, the president – elect had disclosed that the subsidy initiative is a fraud which has distorted the progress expected in the sector. He is also said to have frowned at the spate of corruption, which has characterized the subsidy regime, thus inhibiting efforts to properly carry-out the turnaround maintenance of the four existing refineries in the country.
Professor David Tam-West, who was a former Minister of Petroleum Resource during Military administration of General Buhari, told Hallmark, that the trillions of Naira spent on both Petrol and Kerosene subsidy within the past few years is a fraud.
He added that on countless occasions, he has argued that the country is forced to pay for scam carried out by oil cartel. He assured that the first major assignment of the president-elect when he is eventually inaugurated is to stop the scam.
The former Petroleum Minister said that during the military administration of Gen. Buhari, there were nothing like petrol or kerosene importation, rather the country was exporting to the product to other countries.
He disclosed that the subsidy scam crept into the economy as a result of the activities of fraudsters who were acting as middlemen in the downstream sector. He added that these men go about importing the refined products into the country, to later make questionable claims.
He said, “The middlemen without remorse make indiscriminate claims with impunity.
Several panels of enquiries have proven that trillions of Naira is being paid to importers without doing anything.
General Buhari has promised to build more refineries and plan to fix the existing ones.
This is possible because we have crude oil that can be negotiated directly to other countries without the necessarily involving middlemen.
“The subsidy and other frauds carried out in the sector are some of the issues that the president-elect will tackle as soon as he takes over. He will not tolerate unwholesome activities of oil marketers. Albeit, unlike his first administration as a military government, he will engage all the major players with respect for the rule of law, emphasis would be placed on restoring confidence of the industry.
He claimed that the president-elect is familiar with the petroleum industry, adding that he is a straight forward person that has respect for democratic principles. As military head of state he deals with the Federal Executive Council with the tenets of democracy.
“Buhari will build new refineries to make petroleum products available for the masses. No responsible government will allow the masses to suffer. We shall build new refineries within a year. It is possible as we won’t spend any amount in setting up a green field refinery. We already have a blueprint as we shall use what we have to get what we want.
Nigeria produces millions of barrels of crude oil per day and if properly harnessed will be okay to get the industry to function properly.
I want to assure you that by the time he takes over, petrol will be dispensed at N40 per litres.
This is possible and he has the credibility to make it work.” The former minister assured.
According to Mr.SeyiOdetola, an economic analyst based in United Kingdom, the president-elect has expressed doubt on the credibility of most the subsidy claim. He noted that it is more likely that he may be tempted to investigate the several claims made by marketers, which will further unravel his earlier submission on the subsidy claim.
Odetola said, “The fact that most filling stations in the country are now dispensing petroleum products after the presidential election, despite the threat by major oil marketers to stop selling the product, in view of the subsidy arrears owed to them by the Federal Government. It is apparent that most of the marketers have been benefiting from the fraud. Where did they get funds to import the product, given the nature of the forex?
“If after the presidential election fuel is still available as if nothing had happened, it is then apparent that there is no fuel subsidy. I believe the president-elect will look into the subsidy regime as soon as he finally settles down for the business of governance. It is also clear that renewed attention will be given to the revamping of the four refineries as well as focus on the construction of new ones.” he noted
Odetola said, “In the long term, through the confidence that will be restored in the downstream and upstream sector, investors will be encouraged to do business which will stimulate the growth of the sector. However, it would be difficult for him, to unitarily remove subsidy without the proper consideration of the plight of the major players in the sector. He would need to re-appraise the cause of inefficiency of the sector.
He further hinted that the president-elect, with his pedigree and respect for rule of law, will completely phase out importation by the time the local refineries are working. This according to him won’t totally remove subsidy. He claimed that subsidy as it is presently constituted, is the promotion of corruption and impunity.
Mr.Olubunmi Martins, who is the Director of Strategic Planning, Research Intelligent , also noted that the subsidy regime is riddled with corruption, which has signpost the present administration. He revealed that the circumstances before the industry will be gradual restoration of the local refineries which has the tendency to take care of local consumption of the petroleum product. According to him, when the issue with the up scaling the activities at the various refineries are addressed then subsidy will no longer be a major concern in the country.