…assures subsidy removal in Nigerians’ best interest
The Lagos State government on Friday advised residents of the state not to engage in panic buying, hoarding, and to stop patronising black marketers of petrol.
The government said though the impact of the removal of subsidy on petrol would be tough initially, things would moderate as market forces determine the prices.
The price of petrol, or Premium Motor Spirit (PMS), shot up by over 100 percent across Nigeria on Monday after the newly sworn-in President Bola Tinubu announced in his inaugural speech that government would not longer pay subsidy on the product. Queues quickly returned to filling stations as many petrol retail outlets refused to sell.
On Tuesday, the Nigerian National Petroleum Company Limited announced a new price regime, pushing up official pump price of petrol from less than N200 per litre to as high as N540 in some parts of the country. This development has fuelled panic buying and hoarding, as well as black marketeering of petrol.
But speaking on Friday during an on-the-spot assessment of some filling stations in the Ikoyi area of the Lagos, the state Deputy Governor, Dr. Obafemi Hamzat, said there was no need for panic buying and hoarding as marketers had assured the government of the availability of petrol in the state.
He noted that the essence of the tour was to go around and see the situation of things, noting that the challenge was not the scarcity of petrol but the price increase.
Hamzat implored Nigerians to embrace the deregulation, adding that the advantages of the subsidy removal outweigh its disadvantages.
“In terms of volume, according to the managers of fuel stations visited, we have enough so there is no need to rush to buy. There is no need to patronise black marketers,” Hamzat said.
“The regime of fuel subsidy was announced to have ended. Lagos is always the epicenter of everything, 40 percent of cabs are in Lagos, and whatever affects PMS affects Lagos. So the essence is to go around and assess the situation,” he said.
The Deputy Governor emphasised that there was no scarcity of petrol and so there was no need for rush.
“Prices have gone up but in terms of volume, there is enough volume. So there is no question of scarcity.
“Don’t patronise black marketers. The bottom line is very simple because there is no regime of fuel subsidy again. People don’t have the incentive to hoard anymore. It was sold for N185 in Nigeria and the Republic of Benin selling for N650, that is why we claim the volume is high, so the volume will crash,” he said.
Hamzat said revenue generation was a major challenge in the country and the government would now divert the funds recovered from subsidy removal to other sectors.
He reiterated that Nigeria, with 48,000km of borders that were not properly manned, was subsidising petrol for other countries.
“Various commentators and IMF have told us we are spending trillions subsidising substantially rich people because we are spending on 13 percent of the less privileged and 87 percent for people who can afford it. It doesn’t make sense,” Hamzat said.
“So if we can plough that money back, then it makes it easier to invest in education, health, and others. So the President will be able to harness it and be able to use it for various projects,” he said.
The Deputy Governor said the government was aware of the effect of the subsidy removal on cost of transportation and commodities but promised that things would turn out better in the long run.
“It is a question of time. In just two or three months, things will stabilise. So, if the international prices crash, they will also crash. Competition will always make it crash, market forces will determine the prices,” he said.
