Fuel marketers sound the alarm, warn against tariff hikes

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has expressed concerns that proposed tariff increases on petroleum products could derail the success of the country’s ongoing subsidy removal policy.

In a statement on Tuesday, IPMAN President Debo Ahmed cautioned against further burdening the downstream oil sector with additional tariffs. He argued that such increases, on top of the already rising fuel costs, could have a “negative domino effect” on the industry’s overall business climate.

According to the IPMAN president, the ‘arbitrary and exorbitant nature’ of the increases burdens existing businesses and discourages new investors while also creating obstacles in the way of their entry

He said the public and consumers bear the brunt of the resultant cost.

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“Those that are already in the business will pass the burden to the consuming public and definitely this affects the cost of products,” Ahmed stated.

“I think NMDPRA, as agent to the Federal Government, should advise them on the way to succeed on this removal of oil subsidy.”

Ahmed also said the recent increase in diesel pricing and the mounting unpaid bills emanating from the old petroleum equalisation funds (PEF) demonstrate the tangible impact on stakeholders in the downstream sector.

“In economics, payment of internal debts increase the economic activities of a country and lessen the attention given to the dollar,” he said.

“When internal economic activities boom, it generates employment and spurs up the value of the local currency.

“IPMAN, as an association, will advise the authorities to critically look into the tariff increase, which will not help the oil subsidy removal.

“Between 2020 and 2023, NMDPRA had increased some, if not all, of its operational tariffs to over 600 per cent and added other unnecessary tariffs, generating lines to the already existing ones.”

IPMAN’s concerns underscore the delicate balance that the government must navigate in pursuing the removal of fuel subsidies.

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