Independent oil product marketers in Nigeria have urged the government to fully deregulate the downstream petroleum sector and abolish subsidies, so as to end fuel shortages, especially kerosene.
The Independent Petroleum Marketers Association of Nigeria, in statement said, the failure of the government to deregulate the sector was responsible for investors' apathy and product shortages.
"When the sector is fully deregulated, many players will come into the business and create an open market that will be attractive and ensure efficient [product] supply," the association said. Building local refineries will also help in addressing the supply crunch, they added.
The marketers blamed the current scarcity of kerosene, a main source of cooking fuel for majority of the population, on the regulation of pump prices.
This has scared away marketers from importing kerosene, leaving only state oil firm NNPC to bring in kerosene, which was not sufficient.
Nigeria has delayed plans to deregulate the downstream oil sector and abolish subsidies due to strong opposition from labor unions.
Nigeria, a leading OPEC member, imports over 80% of its petroleum products, but the huge cost of subsidizing imports, in order to keep domestic prices low, has hit $2.6 billion this year alone.
Meanwhile, governors of Nigeria's 36 states have also asked President Goodluck Jonathan to end subsidies on imported fuel and make the Naira 500 billion ($3.3 billion) annual spend on subsidies available to the states, the local Thisday newspaper reported Thursday.
The governors, under the Nigerian Governors Group, called for immediate removal of fuel subsidies and implementation of total deregulation.
Public sector workers in many of the states have served strike notice, demanding governments pay the new minimum monthly salary of Naira 18,000 ($120), which governors say their current lean resources could not shoulder.
