Page 6 - DMEA Week 06 2022
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DMEA POLICY & SECURITY DMEA
Nigerian CEO calls for
elimination of gasoline subsidy
AFRICA GEORGE Onafowokan, the CEO of Nige- no longer subject to subsidies. “If we look at it,
ria’s Coleman Wires and Cables, has said he where are we seeing the first investment in the oil
believes that the elimination of the government’s sector? It is modular refineries. What do mod-
long-standing gasoline subsidy is likely to have ular refineries first produce? Diesel, because it’s
a positive long-term impact on the national oil deregulated,” he declared.
and gas industry. The CEO acknowledged that there were
In an interview with the Punch newspaper, short-term costs to the elimination of price sup-
Onafowokan said that the lifting of price sup- ports, saying that the cost of living was sure to
ports would help open up the Nigerian economy. rise if the federal government stopped subsidis-
Without the subsidy, he said, there will be more ing gasoline prices. He noted, though, that the
room for private-sector investments that can increase would not be exactly proportional.
help support industrialisation, job creation and “Fuel prices going up by 100% or more does
foreign direct investment (FDI). not mean an instantaneous 100% increase on
Nigeria has already seen this happen now that everything,” he explained. “No matter your
the federal government is no longer subsidising overhead cost, fuel alone cannot account for all
diesel prices, he argued. “We have deregulated the increase. An impact of the increase in fuel
diesel for about 10 to 12 years. It started from price by 100% might mean a 20 or 30% increase
the Obasanjo regime when they deregulated in product prices.”
and said they were not subsiding diesel,” he told He also spoke strongly in favour of reduc-
Punch. ing government intervention in the economy,
“Has the economy not readjusted itself? We saying: “I’m not going to be looking at the gov-
are buying diesel for NGN350 [equivalent to ernment to make investments in petroleum
$0.84 per litre]. Has anybody complained? It’s products anymore. Any business in the world
been going up and down over the last 12 to 13 will now see Nigeria as a viable investment. We
years. How it impacts production, how it impacts look too much at the government to make deci-
transportation has become part of the adjustable sions. We don’t look at the private sector impact
price index.” of that decision. We need to get away from
In fact, Onafowokan remarked, diesel has government direction to driving our economy
actually attracted more attention from the through private sector. There is no economy that
most innovative and fastest-moving investors thrives well with the government being the big-
in the downstream sector precisely because it is gest business owner. I haven’t found one.”
P6 www. NEWSBASE .com Week 06 10•February•2022
