Robert Dickerman, the Chief Executive Officer and Managing Director of Pinnacle Oil and Gas Limited, has disclosed that the Nigerian Government continues to allocate one trillion naira monthly for petrol subsidy, despite the announced total deregulation of petroleum products by President Bola Tinubu during his inauguration.
During a panel discussion at session six of Nigeria’s Downstream Forum, held at the Nigeria International Energy Summit (NIES) in Abuja, Dickerman emphasized the persistent subsidy’s impact on the nation’s economy and neighboring countries.
According to Dickerman, the substantial subsidy contributes to the relatively low cost of gasoline in Nigeria compared to other African nations, prompting smuggling activities that further drain Nigeria’s resources.
He highlighted the expectations of foreign investors and lenders, emphasizing the necessity for conservative fiscal policies, anti-corruption measures, competitive markets, and fair market enforcement. Dickerman underscored that despite deregulation, a significant subsidy remains in the foreign exchange portion of the petrol price, exacerbating budget constraints and hindering critical program funding.
Dickerman warned of the challenges associated with halting subsidy payments, noting that without domestic refineries, Nigeria relies solely on international markets for petrol supply, which would only sell at market prices.
The revelation by Pinnacle Oil’s CEO sheds light on the persistent financial burden of petrol subsidies and the complexities involved in reforming Nigeria’s petroleum sector.
