Page 12 - AfrOil Week 06 2022

AfrOil POLICY AfrOil

Nigerian CEO calls on government

to eliminate gasoline price subsidy

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

PROJECTS & COMPANIES
Sonatrach, DEPA extend LNG supply deal

ALGERIA ALGERIA’S national oil company (NOC) said they had agreed to prolong the term of their
Sonatrach and Greece’s state-owned natural gas existing contract while also adapting the terms
company DEPA confirmed on February 4 that of that contract to bring them into line with cur-
they had extended their long-term LNG supply rent trends and anticipated future developments
contract the day before. in global energy markets. The changes will take
In separate press releases, the two companies effect retroactively as of January 1, 2022.

P12 www. NEWSBASE .com Week 06 09•February•2022