Not Again! FG may remove petrol, kerosene subsidies soon
This is following the increasingly dwindling revenue from the products allegedly due to sabotage, diversion of products, hoarding, panic buying and rumours of imminent pump price increase.
Alison-Madueke also outlined the challenges confronting the government in the oil sector to include perennial oil theft, pipeline vandalism and non-passage of the Petroleum Industry Bill.
The minister said this on Tuesday at the ongoing Nigerian Oil and Gas Conference in Abuja.
According to her, the subsidy paid to oil marketers by the FG is no longer sustainable implying that the practice may soon be put on hold.
"The continued regulation of the downstream sector has its positive and negative impacts on the economy. But the negative effect is more than the positive. The subsidy policy cannot be sustained any longer.
"This is because the subsidy payment is not benefiting the poor it is targeting; rather, it is benefiting the rich. The industry needs to move to next level by increasing revenue and curbing oil theft and pipeline vandalism.
"Without belabouring the point, we are all aware that the government has to deregulate the downstream sector. Continuing regulation, we all are aware, has negative effects. It is basically unsustainable, it discourages investment, and principally, it benefits the rich, not the masses in the society that we intend to reach in the first place.
"This means that deregulation is the only way in which capital investment can be encouraged. It can give employment opportunities. At the same time, we are all aware that in a democratic polity, there has to be a balance between different policies and directives of government and the needs and desires of the people of Nigeria at all times."
If this planned subsidy removal is effected, Nigerians would have to purchase petrol at a minimum of N144.66 per litre against the official regulated price of N97. Thos is said to be the landing cost of the product and the distribution margins as contained in the pricing template prepared by the Petroleum Products Pricing Regulatory Agency for the month of March.
