Petrol subsidy debate: Nigeria asking wrong question – Makinde

The African People’s Movement presidential candidate and Oyo State Governor, Seyi Makinde, has said Nigeria’s debate over petrol subsidy is focused on the wrong question, arguing that the country needs to review its petroleum pricing framework.

Makinde made the position known in the September edition of his newsletter uploaded on Friday, The Business of Governance, where he said Nigerians should be able to understand the factors determining the price of petrol.

“We are asking the wrong question. The more important question is: what is the right pricing framework for an oil-producing country like Nigeria?” he said.

He said the pricing framework should clearly disclose the crude oil price benchmark, refining costs and margins, exchange-rate assumptions, logistics and distribution costs, taxes and levies, as well as other variables used to determine pump prices.

Makinde also argued against making Nigerians pay higher petrol prices simply to discourage smuggling into neighbouring countries.

“We should also reject the argument that Nigerians must pay more for petroleum products simply to eliminate the price difference that makes smuggling into neighbouring countries profitable. Nigerians should not be made to bear the cost of government’s inability to secure its borders,” he said.

The governor said the debate should therefore move beyond whether subsidy should be restored or remain removed, stressing that Nigerians deserved to benefit fairly from the country’s natural resources.

“The petroleum question should therefore not simply be whether subsidy should return or remain removed. It should be whether the pricing system we are using is the right one for Nigeria and whether it allows Nigerians to derive a fair benefit from the natural resources they own,” he said.

Makinde added that he would present an alternative petroleum pricing framework in the coming weeks for Nigerians to assess.