The command and control ideology of President Muhammadu Buhari, such as his refusal to deregulate the downstream oil and gas sector and the sudden cut in pump price has delivered a fresh blow to major oil marketers as revenue dwindled.
As a result of the cut in pump price, the 2015 audited financial statement of four oil companies (Total Nigeria Plc, Mobil Nigeria Plc, MRS Nigeria Plc and Forte Oil Nigeria Plc) showed cumulative revenue fell by 16.13 percent to N483.96 billion. Combined net income dropped by 7.42 percent to N15.16 billion, data gathered by Nairametrics shows.
Industry operators who spoke with Nairametrics said after factoring the various cost of importation of petroleum products and arriving at the final selling price, said government decision to fix the price of pump at N86.50 last year and early this year dampened oil major’s revenue.
We in Nairametrics believe total deregulation of the sector and removing the fraud called fuel subsidy will give room for better transparency and spur firms to growth since setting their own price will boost sales and trickle down to the bottom line.
Africa’s largest economy Nigeria has been grappling with fuel scarcity as gasoline importers, due to the Central Bank foreign exchange restrictions, are unable to access the required dollars for the importation of petroleum products.
Goodwin Emefiele, the apex bank’s head, has the backing of President Buhari on his capital control rules.
With a population over 170 million people that crave for consumption of energy, a free market economy that will pave the way for oil companies to sell petroleum products at competitive prices will enhance product availability.