New Telegraph

Pinnacle Boss: Nigerian Political Leaders Believe Subsidised PMS Is A Right

Chief Executive Officer, Pinnacle Oil & Gas Limited, Mr. Robert Dickerman, has said the high pump price of fuel in Nigeria is caused by the depreciation of the naira and not necessarily by the withdrawal of fuel subsidy by President Bola Tinubu on May 29, 2023.

Dickerman, who declared this in an interview with New Telegraph, also hinted that political leaders in the country had come to see subsidy as a right.

He said that it was important for the government to pursue fiscal and monetary policies that will make the naira appreciate, stressing that the greatest long term problem in the downstream industry in Nigeria was lack of market.

Dickerman said: “A market is defined as many buyers and many sellers with the prices being determined by supply and demand. This is like a very simple concept but we have never had this for decades in Nigeria because subsidy has been considered a natural right here and it is expected by so many people and so many political leaders believe that a subsidied PMS particularly is a right.

“Unfortunately having subsidy in place has very unfortunate unintended consequences to the economy and we are suffering them greater now and last year than we have ever had.

Those unintended consequences include the fact that there can only be one seller of all imported products and all products until Dangote started operation are imported. “Therefore as the NNPC is the only one that has the subsidy, it is foreign exchange (FX) subsidy, it is not a subsidy on the price of gasoline in dollars, it is a subsidy on FX.

You need FX to buy petrol, it is priced in dollars in the world market. Because they are the only ones, they decide who gets the product.” He said another problem is the fact that because the subsidy is so expensive there is need to be supplied according to the demand, which is creating a shortage.

According to him, “another unintended consequence is that their prices are not just below the market, they are below the prices in other neighbouring countries like Niger, Cameroun and all other markets next to us, therefore it incentivises smuggling.

And wherever there is incentive for smuggling, smuggling will happen. There is also corruption but I will not go into details here.

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