The Independent Petroleum Marketers Association of Nigeria has linked the recent surge in fuel prices to alleged extortion by the Department of State Services (DSS) and the police, coupled with additional levies imposed by Federal Government agencies.
The revelation came during a public hearing convened by the House of Representatives ad hoc Committee on the recent fuel price increase.
Chinedu Okoronkwo, the National President of IPMAN, voiced concerns about the detrimental impact of these alleged practices on fuel costs.
He highlighted that IPMAN members have refrained from direct fuel importation due to an outstanding debt of approximately N250 billion owed to the Nigerian National Petroleum Company Limited.
The IPMAN President’s testimony also underscored the urgent need for the Federal Government to intervene and curb arbitrary charges that contribute to the escalating fuel prices, urging government agencies to take corrective action.
Turning to potential solutions for the challenges faced by the oil sector, President Okoronkwo advocated for a transition to Compressed Natural Gas (CNG) and urged the government to consider removing fuel subsidies.
He emphasized that this move could pave the way for substantial savings to fund critical infrastructure projects, despite the immediate hardships posed by subsidy removal.
“In spite of the excruciating pain of subsidy removal, it is something that can act as a succour in the country if we must live and be happy,” Okoronkwo stated, highlighting the importance of energy security and the abundant natural gas resources available in Nigeria.
Meanwhile, Brian Amonu, a partner of IPMAN and the Managing Director of Gas Analytics and Sorutiral Index, shed light on Nigeria’s abundant gas reserves.
Amonu pointed out that the lack of an organized market for gas has led to significant flaring of this valuable resource, exacerbating environmental concerns.
Amonu proposed a solution involving the Central Bank of Nigeria (CBN), suggesting the establishment of a N250 billion gas expansion facility to support the utilization of natural gas. He urged the government to provide loans to vehicle owners, allowing them to convert their vehicles to CNG-powered ones.
This, he argued, would stimulate investments along the value chain and facilitate the widespread adoption of CNG as a cleaner and more sustainable alternative to traditional petroleum-based fuels.
“The solution is here, we have been preaching this since last year. The government does not have to do anything new; there is funding at CBN to support this,” Amonu emphasized, drawing parallels with successful transitions to natural gas in countries like India, Egypt, Bangladesh, and Iran.
In conclusion, the revelations made during the public hearing have brought to light the intricate web of factors contributing to the fuel price hike.
IPMAN’s call for action, including addressing alleged extortion, reducing arbitrary charges, and embracing alternative fuels, underscores the pressing need for comprehensive reform in Nigeria’s energy sector.
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