Rainoil Boss Urges FG to Stop Petrol Subsidy

Peter Uzoho

The Group Managing Director of Rainoil Limited, Dr Gabriel Ogbeche, has called on the federal government to end  petrol subsidy and expend the funds in other critical sectors of the economy.

Ogbechie said that Nigeria cannot continue to spend over N3 trillion on a single product, while other critical sectors continue to suffer, adding that the country was ripe for deregulation to allow market forces drive the petroleum marketing business in the country.

The Rainoil GMD made the intervention in Lagos at a briefing to herald the firm’s 25 years anniversary as a major downstream petroleum industry player in the country since 1997. 

Nigeria’s petrol subsidy spend for 2022 has been pegged at N4 trillion as the National Assembly recently approved President Muhammadu Buhari’s request to raise the subsidy budget to N4 trillion, citing changes in inflation and the rising oil prices.

The government had planned to remove petrol subsidy and fully deregulate the downstream petroleum sector by the second half of this year, but in January it  shifted the plan by 18 months. 

Nigeria currently sells petrol, which is 100 per cent imported at a subsidised pump price of N165 per litre, even when the landing cost alone is over 100 per cent higher than the pump price, with a large volume of the product smuggled to neighbouring African countries where the product sells higher.

However, Ogbeche expressed concern over the parlous state of the Nigerian economy, which he attributed partly to the huge resources used to subsidise petrol, insisting that government must deregulate the downstream sector to curb wastages and loss.

“Nigeria is over-ripe for deregulation. The over N3 trillion currently being spent to subsidise petroleum products in the country can be diversified into other critical sectors like education, health, road infrastructure, power, among others,” he said.