Managing Director, Petroleum Products Marketing Company (PPMC), Mr. Isiyaku Abdullahi, has said that the full deregulation of the petroleum downstream sector will save Nigeria N12 trillion in four years.

Abdullahi stated that with the price of crude oil at $80, Nigeria now pays N8.3 billion daily on fuel subsidy.

Abdullahi spoke at the ongoing 15th Oil Trading and Logistics (OTL) Africa Petroleum Downstream Week 2021 on Wednesday in Lagos.

He said: “At $80 crude oil, 60 million litres daily consumption and N411 to a dollar foreign exchange, Premium Motor Spirit (PMS) underrecovery (petrol subsidy) per litre will be N138 per litre.

“Daily PMS underrecovery will be N8.3 billion. Annual PMS underrecovery will escalate to N3 trillion.”

Abdullahi said the savings made from the removal of subsidy on petrol could be channelled to other critical areas such as infrastructure, health care and education.

He noted that the removal of subsidy would make the price of petroleum products in Nigeria at par with its African neighbours and discourage smuggling.

According to him, with the signing of the Petroleum Industry Act (PIA), the country is moving towards full deregulation of the downstream sector which will attract more investments.

Similarly, Mr. Adeyemi Adetunji, Group Executive Director, Downstream, Nigerian National Petroleum Corporation (NNPC), maintained that prices of petroleum products would be determined by free market under the PIA.

He said: “The PIA has provided an enabling environment to attract investment, ensure fair competition for operators and fair price for consumers and producers to ensure industry stability.

“The fuel market is expanding in view of the emerging gas opportunities. Investors and existing players should seize these opportunities to create value for all stakeholders.”

On his part, Dr. Muda Yusuf, a former Director General of the Lagos Chamber of Commerce and Industry (LCCI), said the government needed to demonstrate political will to end the subsidy regime.

Yusuf, who is the Chief Executive Officer, Centre for the Promotion of Private Enterprise, said the inability to fully deregulate the sector was a major impediment to unlocking its huge investment potential in the past five decades.

However, Dr. Obinna Ogbonna, National Auditor, Trade Union Congress (TUC) said labour unions had given the government certain conditions that should be fulfilled before the removal of subsidy.

He said: “What we are saying is that for there to be full deregulation, government should provide palliatives to the masses and should ensure that there are no job losses in the implementation of the reforms in the sector.”