…investors would not come into the sector
Critical stakeholders in the downstream sector of the petroleum industry have knocked the government for another policy summersault in respect of its refusal to remove subsidy as planned.
According to them, policy summersault which is a constant feature of this government has been one of the reasons why investors are scared of making investments in the sector.
Some of the stakeholders that Business Standards spoke to in respect of the latest government move not to implement what was clearly stated in the Petroleum Industry Act ( PIA) two years into the life of the Act, said they pray Nigeria would not go the way of Venezuela that went into bankruptcy because of the way it handled its oil and gas industry.
A few of them described government action as insensitive to the investors in the sector because they were not taken into confidence by the government before it throws the decision at them.
“Some of us are already planning towards the expected removal of subsidy, thinking of how we can source foreign exchange to finance importation and disrupt the system, gearing up for investment in the downstream sector of the petroleum industry. This is why investors find it difficult to follow government policy. To say the least, I am defeated”, an industry operator said.
In his reaction to this development, the managing director of 11plc and former chairman of the Major Oil Marketers Association of Nigeria (MOMAN) Tunji Oyebanji, said that the government normally set the environment under which the downstream operators operate and as such they have no choice but to do so.
“We know what is good for the industry; we also suggested what we think the government should do. But we have to operate under whichever environment the government says we should operate. But this development is not the best for the economy and the country.
We hope that when the incoming administration settles down, it would look at the matter and see what can be done.”
He said the government did not give the operators any inkling about it but rather they heard just any other people.
However Paul Alaje, an economist, in his reaction on Channels Television, last night, said what the government has done has been what his organization has been advocating for.
According to him, before President Muhammadu Buhari came to office he had mentioned that there was no subsidy, and When he got to office, he said, yes, there is subsidy and something must be done about it.
“In 2023 the government had said that there would be no subsidy as it would allow the market forces to determine the price of the commodity, but we believe that this would not be the right approach.
We strongly believe that without doing the needful, which include making the local refineries work, at least three to four of them should be working, there would be no basis for subsidy removal.
Yet, it hurts, over N3 trillion, and yet the government said what it made provision for is just from January to June 2023.
How do we now explain $800 million collected from international organizations. What becomes of this money? Is it going to be handed over to the incoming administration?
