The Federal Government of Nigeria spent N10 Trillion on petroleum subsidy in the ten years.
The Chairman, Major Marketers Association of Nigeria, MOMAN, and Managing Director of 11Plc, Tunji Oyebanji stated this at the maiden webinar series organized by Association of Energy Correspondents of Nigeria , NAEC, with the theme: “Challenges and Impact of a Deregulated Downstream Sector on Nigeria’s economy”, last weekend.
“Nigeria Spends N10 trillion on Petroleum subsidy in ten years, this huge amount spent on subsidy will enable Nigeria to build 16 million boreholes, 1 million class rooms, 300,000 fully equipped primary healthcare centres to mention but a few. Apart from the above facilities, Nigeria will save N1 trillion yearly if not spent on subsidy”, he said.
“The Cost of fuel subsidy is affecting Nigeria negatively. This include, increasing number of truck accidents / explosions, degradation of industry infrastructures, lack enough margins generated to maintain, renew and upgrade industry infrastructures”, he added.
The removal according to him will have positive impact such as alignment with the Nigeria National Petroleum Policy, construction and maintenance of refineries, establishing Nigeria as the refining hub for Africa and product availability in the country and for export and increased foreign exchange earnings.
The Chairman maintained that an urgent choice had to be made that resulted in a win-win situation for all stakeholders who are affected or impacted by the decision within the limits of societal values.
“Adopting this change however, had with it, its own set of challenges”, he said.
The removal according to him will lead to the growth of local refining capacity, leading Nigeria to become a net exporter of refined petroleum to West and Central Africa, meeting local and regional demands and earning Nigeria increased foreign exchange.
“This will also lead to the beneficiation of all petroleum products and the increase in ancillary industries, raising the nation’s GDP and increased economic growth”, he stressed.
Earlier in his welcome address, the Ag. Chairman, Association of Energy Correspondents of Nigeria, NAEC, Ugo Amadi, said the aim of this webinar series is to analyse the econometrics of the challenges and impact of a deregulated downstream sector on Nigeria’s economy.
He said, globally, reasons for reforms in the public sector vary from country to country depending on the objective, peculiarity and the circumstances that such country finds itself.
“The issue of reforming our downstream sector such as Refining and Distribution of petroleum products has been on for quite some time, although, it was only recently that the federal government removed subsidy, leading to increment in petrol prices. As a matter of fact, the retail price of petrol increased by about 10 percent to about N160 per litre”, he said.
