Nigeria is asking the wrong question in petrol subsidy debate, Makinde says

Nigeria’s petrol subsidy debate is focused on the wrong question, Oyo State Governor Seyi Makinde says. The issue, he argues, should be whether the country uses a fair and transparent pricing framework for an oil producer.

In his September newsletter, The Business of Governance, Makinde said Nigerians should be able to see how pump prices are calculated. He called for disclosure of the crude oil benchmark, refining costs and margins, exchange-rate assumptions, logistics and distribution costs, taxes, levies and other variables.

“

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

Makinde also rejected the argument that Nigerians should pay more for petrol simply to remove the price gap that makes smuggling to neighbouring countries profitable. He said citizens should not bear the cost of the government’s failure to secure the borders.

“

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.

The governor said the debate should move beyond whether the subsidy should return or remain removed. The broader question, he said, is whether the pricing system allows Nigerians to receive a fair benefit from the natural resources they own.

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

“

The petroleum question should therefore not simply be whether subsidy should return or remain removed.