Mixed reactions trail deregulation in business community

Small and medium scale business enterprises, which largely depend on petrol, also known as PMS (Premium Motor Spirit) have varying reactions to plans by the government to deregulate the downstream sector of the oil industry.

Bunmi Adebiyi, a fashion designer, who spoke to NEXT on the issue, berated the federal government for its plan to embark on the deregulation as, according to her, this will affect most of the small businesses which are still trying to find a footing in the country. Mrs. Adebiyi said the plans to remove the subsidy in petroleum products is unfair to small businesses.

"Most businesses in Nigeria are being run on generating sets as we have to power our machines ourselves if we are to remain in business because the government's source of power is unstable. Any increase in the price of fuel will definitely make things more difficult since we will have to start paying more to buy fuel and this will increase our charges. In the long run, the effect of this will be hard on Nigerians as there will be an increase in the prices of everything in the country. It seems the government is bent on increasing the hardship of the masses," she said.

Support for deregulation

However the director-general, the Lagos State Chamber of Commerce and Industry, Muda Yusuf, in a telephone interview with NEXT, said the plan to deregulate the downstream sector will have a positive effect if properly managed. According to him, "The deregulation of the downstream sector may at first have a hard effect on the country, especially on small businesses using PMS and those using cars, but on the long run it will be beneficial to the nation's economy as this will allow improvement in the private sector. This will give room to more private investments and refineries, can open the market and a better pipe line management than what is obtainable now."

He added that "The short term effect of this will be the increase in fuel price but in a long term will benfit the nation as there will room for more competition in the sector," In addition to all this, Mr. Yusuf said the money saved from deregulation can be utilised for other purposes. According to him, "If the government manages it well it will be able to divert the money used for subsidising the product into other developmental means such as infrastructural development in terms of road and rail network which will also improve business transactions in the country,"

Deregulation crisis

Opposition has been mounted against the proposed deregulation by Nigerian workers. The Nigerian Labour Congress (NLC), for instance, organised a series of protest marches acrosss major cities and Abuja last month in protest against the plan, saying it will have a drastic effect on the Nigerian masses.

One of the major reasons given by the NLC for rejecting the policy is because it believes the government is not serious about fighting endemic corruption in the oil industry. The NLC president, Omar Abdulwaheed, in his address at the National Assembly during the rally, said workers are against the policy as it is not in favour of the working masses.

"The subsidy is not the problem in the downstream sector; the problem is the high rate of corruption perpetrated in the sector. It is only a few Nigerians that stand to benefit from the act and it is unfair on the part of the government to increase the hardship of Nigerians by increasing the price of petrol to N104," he said.