The Petroleum and Natural Gas Senior Staff Association of Nigeria, a branch of the Petroleum Products Pricing Regulatory Agency, PPPRA, has called for the adjustment of the current fuel pump price with the introduction of fuel tax.
The association has proposed the addition of N1.50 to the current fuel price of N87 per litre as fuel tax, an increase that would bring the price of petrol to N88.50 for a litre.
The union said on Tuesday that introducing fuel tax, a special tax imposed by government on fuel consumption by citizens, in the country’s fuel pricing template would help replace the subsidy elements in the current template.
The proposal, they said, could also help generate revenues from the sale of petroleum products to be channelled into key sectors of the economy, especially for the execution of social programmes, like road construction and maintenance, health care delivery and education.
In the face of dwindling earnings in recent times as a result of the sharp drop in global crude oil prices, the Federal Government has proposed a number of measures to shore up national income.
The branch chairman of the association, Victor Ononokpono, who said that fuel tax could provide alternative revenue source for critical services, noted that Nigeria was one of the few countries without a tax component in the local pump price.
“It is an anomaly to allow petroleum marketers profit from the available margins without considering the social function of a very vital economic product like petrol and other white products,” Mr. Ononokpono said.
According to him, fuel tax, like highway maintenance and consumption tax in most advanced countries, has the overall objectives of revenue generation, social infrastructure, investment and servicing efficient fuel usage.
The union, which also called for improved funding for the petroleum products pricing agency, said the challenge of monitoring and regulating the country’s petroleum industry was overwhelming without adequate funding.