The Federal Government has been told to adopt a smart card initiative that will enable interested owners of commercial vehicles, including official vehicles owned by educational institutions, hospitals, religious bodies and government agencies to register and obtain smart cards for purchasing fuel at regulated prices from petrol stations owned by the Nigerian National Petroleum Corporation.
The Head, Banking and Finance Department, Nasarawa State University, Keffi, Uche Uwaleke, stated this during a chat with journalists in Abuja on Wednesday.
He said the model, which had already recorded huge success in Egypt and Libya, would help to address the lingering issue of fuel scarcity in the country.
According to him, the need to adopt the model has become imperative following claims that the N145 per litre pump price of petrol is no longer sustainable as a result of the high price of crude oil in the international market.
Uwaleke, an associate professor of finance, recommended that with the smart cards, which would be swiped at NNPC filling stations, consumers would be able to buy a limited amount of subsidised fuel, and would need to pay the market price for any extra volume of fuel bought.
He added that private car owners, on the other hand, would be expected to buy fuel at the market price from filling stations operated by private sector investors.
Uwaleke stated, “The NNPC cannot continue to shoulder the responsibility of petroleum products importation alone without the support of the private sector.
“Indeed, many argue that fuel subsidies come with negative consequences for the economy, including encouraging wasteful energy consumption, creating fiscal burdens on government budgets, increasing health and environmental costs of fossil fuels, as well as helping to promote inequality.
“In fact, studies have shown that the richest 20 per cent of households in low and middle-income countries use six times more subsidised fuel than the poorest 20 per cent.
“But then, it is equally a fact that the removal of subsidy will have catastrophic consequences for the poorer strata of the society.”
He added, “Therefore, the right balance that guarantees minimal distortion to the economy is for Nigeria to domesticate a model, which has been used with some degree of success in some oil producing countries in Africa, notably Egypt and Libya.
“It is the fuel smart card initiative whereby interested owners of commercial vehicles, including official vehicles owned by educational institutions, hospitals, religious bodies and government agencies, will be required to register and obtain smart cards for purchasing fuel at regulated prices from the NNPC filling stations.”