- The reasons behind the recent deregulation policy of the federal government have been explained
- Timipre Sylva, minister of state for petroleum, said it is unrealistic to continue subsidizing PMS for trillions of naira annually
- The minister also stated that the subsidy was benefiting the rich rather than poor and ordinary Nigerians
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The federal government has explained its stance regarding the knotty issue of petroleum products deregulation.
Timipre Sylva, minister of state for petroleum, in a statement he personally signed on Wednesday, July 8 explained that the federal government concluded that it was unrealistic to continue with the burden of subsidizing PMS to the tune of trillions of naira every year.
According to him, the decision was taken after a thorough examination of the economics of subsidising PMS for domestic consumption.
The minister explained that the new policy will open up investments in the oil sector. Photo credit: NNPC
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He also stated that the subsidy was benefiting the rich rather than poor and ordinary Nigerians.
He, however, said the government was mindful of the likely impact of higher PMS prices would have on Nigerians, adding that to alleviate the impact, the ministry will roll out the auto-gas scheme, which will provide Nigerians with alternative sources of fuel and at a lower cost.
He informed that deregulation means that the government will no longer continue to be the main supplier of petroleum products.
He stressed that the next stage in the sector is for the government to encourage private investors to take over the role of supplier of petroleum products.
“This means also that market forces will henceforth determine the prices at the pump.
“This is a necessary action taken by a responsible government in the overall interest of Nigerians,” he stated.
According to him, such far-reaching decisions is one of the reasons the Buhari administration have been unable to attract the level of investments into the refining sector.
He further said there is a need to free up the investment space “so that what happened in the banking sector, the aviation sector and other sectors can happen in the midstream and downstream oil sector.”
“We can no longer avoid the inevitable and expect the impossible to continue. There was no time Government promised to reduce Pump Price and keep it permanently low,” he added.
The minister noted that in addition to attracting investments and creating jobs, the new policy direction will free up trillions of naira to develop infrastructure instead of enriching a few in the sector.
Meanwhile, the chief operating officer in charge of Joint Ventures and Business Development of the Nigerian National Petroleum Corporation (NNPC), Roland Ewubare, has resigned.
The top NNPC official who is from the south-south region is reported to have resigned due to health reasons.
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