Fuel subsidy no longer sustainable – FG

Minister of Petroleum Resources, Mrs  Diezani Alison-Madueke, who disclosed this at the ongoing Nigerian Oil and Gas conference in Abuja yesterday, said subsidising petroleum products was benefiting  few people who she accused of impoverishing the poor in the country.She stated that the federal government would soon reform the downstream sub-sector of the petroleum industry, adding […]

Minister of Petroleum Resources, Mrs  Diezani Alison-Madueke, who disclosed this at the ongoing Nigerian Oil and Gas conference in Abuja yesterday, said subsidising petroleum products was benefiting  few people who she accused of impoverishing the poor in the country.
She stated that the federal government would soon reform the downstream sub-sector of the petroleum industry, adding that the continued regulation of the downstream sector has multiple impacts on the economy.
She said: “But the negative effect is more than the positive. The subsidy policy cannot be sustained any longer. This is because the subsidy payment did not benefit the poor it was targeting but rather it is benefiting the rich. The industry needs to move to the next level by increasing revenue and curbing oil theft and pipeline vandalism.”
She explained that deregulation of the downstream sub-sector was germane in view of the need to attract investors who are willing to invest under a deregulated regime.
“The need to balance government policy and the needs and aspirations of Nigerians makes it imperative to attract investment into the downstream sub-sector through deregulation,” she stated.
She blamed the current fuel scarcity on sabotage, diversion, hoarding, panic buying and rumours of imminent pump price increase, lamenting the non-passage of the ‘famous’ petroleum industry bill (PIB).
She said: “The PIB is still with the National Assembly and we hope that it will be passed very soon. However, we have been confronted with the menace of pipeline vandalism for decades and it has become much more prevalent in the last few years.
“In 2013 alone, all the major crude oil pipelines were severely damaged and vandalised at different points in time. The Bonny-Escravos line from the refinery was not spared either. This includes direct and indirect costs for the provision of security, crude oil and petroleum products losses, production and environmental degradation and associated remediation cost to that and resulting escalation of project  implementation cost that go along with it.”
She said gas production also increased from 6.3 trillion standard cubic feet, per day, to 8.1 trillion standard cubic feet, per day, in 2013.