Subsidy Removal Rumour: Marketers Hoard Petrol

Unsure of the policy direction the Buhari administration will take towards the petroleum industry, Indications emerged on Sunday that some marketers of refined petroleum products had resorted to stockpiling the products.
It was gathered that the marketers believed that stockpiling petroleum products ahead of a likely deregulation would boost the value of the products when eventually they were made available to consumers after the sub-sector might have been fully deregulated, which automatically would result in petrol and kerosene being sold for higher prices.
As of Thursday last week, the eve of the handover to the new administration, the country was paying N41.57 as subsidy on every litre of petrol, according to data obtained from the Petroleum Products Pricing Regulatory Agency.
If deregulation eventually happens, consumers of petrol will be paying N128.57 for a litre of the product based on the current PPPRA pricing template of N87 official pump price plus the subsidy of N41.57.
Commenting on the development, a former Chairman of the Independent Petroleum Marketers Association of Nigeria, Western Zone, Mr. Olumide Ogunmade, said it was normal for the marketers to be apprehensive of possible changes that could come with the new government.
Ogunmade, who said the marketers as well as other Nigerians were expecting a change in policy as far as the current petrol subsidy programme was concerned, said, “Nobody expects the new government to continue with the status quo.”
He said with the depleted treasury inherited by the new government, among other challenges, its decisions could be pragmatic given the realities on the ground.
Marketers, he said, would likely take precautions so that they would not be caught unawares.

“We don’t know the policy of the new government, but we are expecting a change,” Ogunmade emphasised.

SOURCE: Punch