There are indications that the Federal Government may have concluded plans to stop subsidising the consumption of petroleum products in the country.
* Mrs. Alison-Madueke
The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, gave this hint on Tuesday at the ongoing Nigerian Oil and Gas Conference in Abuja.
According to the minister, the subsidies being paid to marketers by the Federal Government on imported Premium Motor Spirit and kerosene were no longer sustainable.
She said, “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.”
According to analysts, if the subsidies on both products are removed, consumers will be paying a minimum of N144.66 for a litre of petrol against the official regulated price of N97.
For kerosene, consumers are expected to pay N154.36 per litre, which comprises the landing cost of N138.87 and distribution margins of N15.49, instead of the official pump price of N50.