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The issue of Fuel Scarcity and challenges in the Oil and Gas Industry in Nigeria will remain until some fundamental issues are addressed like Subsidy, access to Foreign Exchange by Fuel Marketers.
Energy Lawyer and Investment analyst, Dr Ayodel Oni, made this disclosure while speaking on TVC News Business Nigeria with Tolulope Ogunjobi on Friday afternoon.
He disclosed that subsidy has reduced supply of Petroleum products in circulation because most marketers are unable to access Foreign exchange primarily the United States Dollars which the Nigerian National Petroleum Corporation Limited has access to.
He disclosed that products hoarding too has contributed in no small measure.
He said their is insufficient numbers in being able to have products available with the Nigerian National Petroleum Corporation making about two Billions Dollars from Crude sales only to plough back more than that into buying refined products.
He said Subsidy is the fundamental problem making things difficult in the Nigerian Oil and Gas industry.
According to him removal of subsidy will ensure that their is competition in the market and marketers will be able to sell at a margin in Nigeria without the need to sell in Benin Republic and Other neighbouring countries where they can always sell for profit.
He said as long as the landing cost remains higher than the pump price their will always be cases of scarcity which is quite obvious.
Going further, he described the issues affecting the sector as fundamental that must be addressed through a more nuanced approach no matter what measures or ultimatum delivered by the Department of State Services or any Other entity.
On what the impact of subsidy on the Petroleum Industry Act, he said the act is a very good one for the gas Sector but said its implementation will be problematic for the Oil industry especially in the downstream Sector.
He said the implementation of the Petroleum Industry Act will not be affected by any major margin through subsidy adding that the subsidy may remain in the industry in some form with the PIA.
He however commended the positive increase that has been seen in the production of Crude by the Nigerian National Petroleum Corporation which he said will impact positively on the nations’ 2023 budget.
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