Nigeria Saves $15.4bn by Removing Petrol Subsidy – Kachikwu

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Nigerian oil minister says the country saved $15.4 billion by removing petrol subsidy

By Anayo Ezugwu  |  Dec 19, 2016 @ 01:00 GMT  |

THE federal government has saved a total of $15.4 billion since it removed petroleum subsidy in the country in May. The government has also attracted investment worth $80 billion into the sector from the various trips Ibe Kachikwu, minister of state for petroleum resources, made to China and India, according to a statement from Idang Alibi, director of press, ministry of petroleum resources.

Kachikwu made this known through Jemila Su’ara, permanent secretary of the ministry, who represented him at the meeting with members of the House of Representatives Committee on Petroleum, Downstream who were on an oversight visit to the ministry. The minister, according to the statement, thanked the National Assembly for supporting the government’s introduction of the price modulation template in May 2016, which he added led to the disappearance of fuel queues in the country.

He claimed the price modulation has eliminated subsidies and liberalised the downstream sector of the oil and gas industry. Briefing the legislators on the activities of the ministry, Kachikwu said the ministry has done much to improve the business environment in the oil and gas industry in order to generate massive investment for the sector.

Other successes achieved include the partial resuscitation of the Port Harcourt, Warri and Kaduna refineries, repair of products pipelines and the resuscitation of supply of products from Atlas Cove to Mosimi, Ibadan and Ilorin after a six-year lull. Other benefits include: improved crude oil supply to Warri and Kaduna refineries.

The statement also quoted Joseph Akinlaja, chairman of the committee, to have described the oil industry as the life blood of the Nigerian economy, hence, the legislators’ interests in the activities of the ministry. Akinlaja explained the committee visited the ministry to know what legislative support they could give to it to achieve its plans, programmes and projects.

He noted that Yakubu Dogara, speaker of the House, was passionate about the passage of the contentious Petroleum Industry Bill, PIB, and that he and the House have done everything within their powers to see to the passage of the PIB into law before the tenure of the current House expires.

Akinlaja also stated that the country looked up to the ministry to ensure fuel availability and its efficient distribution, adding that the House will support it to ensure that petroleum products are supplied at affordable and sustainable prices.

The federal government had on Wednesday, May 11, 2016, announced the removal of fuel subsidy from petroleum products in the country. Kachikwu said any Nigerian entity is now free to import petroleum products into the country, subject to existing quality specifications and other guidelines issued by regulatory agencies.

Kachikwu’s pronouncement effectively ended the fuel subsidy regime. The minister said that all oil marketers would be allowed to import the product on the basis of foreign exchange procured from secondary sources and that PPPRA template would reflect this in the pricing of the product.

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