Nation
‘Without Alternative Energy, Petrol Price’ll Rise on Subsidy Removal’
The Department of Petroleum Resources (DPR) has warned that the pump price of petrol in the country may rise up to as much as N1,000 per litre when petrol subsidy regime comes to an end without an alternative energy source.
The DPR stated this just as some oil and gas experts have advocated for a measure from the government that will ensure that Nigeria gets commensurate value from its abundant oil and gas resources like its fellow oil producing nations.
The Director of DPR, Mr. Sarki Auwalu, said this while responding to questions and comments generated by a paper he delivered in Lagos, recently, at the Second Quarter, 2021 Business Dinner of Petroleum Club, Lagos.
The topic of the paper was, “A Discussion on the Future of the Nigerian Petroleum Industry.”
The questions and comments came from a former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Funsho Kupolokun; political economist and Founder of Centre for Values in Leadership, Prof. Pat Utomi; Production Geologist at Shell Nigeria, Mr. Adedoyin Orekoya; and Chairman of AA Holdings, Mr. Austin Avuru; amongst others.
Responding to the subsidy concerns and the disparity in the petrol consumption figures given by NNPC and the DPR, as raised by Orekoya, Auwalu, acknowledged that Nigeria was spending so much on petrol subsidy.
He said eliminating it would require making alternative fuel available to Nigerians and that failure to do that will plunge Nigerians into paying higher petrol prices when subsidy is removed.
He stated that Nigerians may be paying as high as N1, 000 to buy one litre of petrol in the country when subsidy on petrol is removed and when the alternative energy or autogas gas policy becomes fully operational.
He, however, said the alternative fuel regime comes with initial cost as it will lead to spending $400 to convert one vehicle from running on petrol or diesel to running on either Liquefied Natural Gas (LNG) or Compressed Natural Gas (CNG).
Auwalu maintained that converting eight million public vehicles currently present in Nigeria to gas-powered will cumulatively cost $3.2billion to achieve.
He said, “So, to eliminate subsidy, they don’t call it subsidy anymore now, it’s under-recovery of purchase. So, to eliminate under-recovery, what you need is alternative fuel. Without alternative, you will subject people to higher prices and that is why we go for price freedom.
“As at today, there are 22 million cars in Nigeria. Eight million are for public use. Imagine if you want to convert every car into gas, the average cost of conversion is $400. Converting eight million cars requires $3.2billion. To do that, there are a lot of environmental investors which can invest and recover from the sale of gas and we are encouraging that.
“Once that is achieved, you will see that PMS can be sold at N1,000. After all, the average distance covered by one gallon equivalent when you compare it with LNG or CNG with respect to energy for mobility, is 2.7 against one; one for PMS, 2.7 for LNG or CNG.
”So, with that advantage, you will see that it creates opportunity for this industry again. The issue of subsidy, volume will all vanish and that is what we are working towards.”
He, however, warned that the rise in Nigeria’s local refining capacity as seen in the coming on stream of a number of refineries in the country without a corresponding increase in the country’s oil production volume may threaten the country’s membership of the Organisation of Petroleum Exporting Countries (OPEC).
The director lamented that out of Nigeria’s over 7,100 reservoirs and its mature basins, the country was recovering just as low as about 1,000, a situation he said, needed the collaboration of all industry players to find a solution to before Nigeria gets evicted from OPEC due to low contribution.
“How do we now get the national production capacity so that we export more, we consume more? Today, we have huge additional capacity in domestic refining. If we don’t increase the production, we have to get out of OPEC, because you can’t be a net consumer to stay in exporting countries.
“So, the challenge is for all of us. As the refining capacity is increasing, we have to now get production capacity to increase so that we remain the net exporter. We believe this will guarantee and fortify the future,” he said.
Responding to Kupolokun’s question on the need to address the low contribution of the oil and gas sector to the country’s Gross Domestic Product (GDP), which is less than 10 per cent, Auwalu attributed the abysmal contribution to lack of deep investment into the value chain of the sector as well as the export mentality of the players.
According to him, only few players, mostly indigenous companies, have the mentality of ensuring that more output, especially with respect to gas, was given to the domestic market to power the country’s economic growth.
He said there was need to focus on domestic market in order to grow the sector’s contribution to GDP.
He explained what the department and the Federal Government were doing to address the two-pronged challenge of energy transition and the transition from the international oil companies (IOCs) operating in Nigeria, who are divesting out of the country, leaving the indigenous oil companies to take over from them.
Auwalu said the department had foreseen such situation and had planned ahead by setting up the Oil and Gas Excellence Centre to equip local companies to be able to fill the gap created by such transition.
“Now, we are saddled with two transitions: energy transition and transition from IOCs to NOCs. Why did we establish Nigerian Oil and Gas Excellence Centre? It’s because of this. We’ve seen this coming; we thought it twice before now.
“It is our duty to make those companies functional, and to do that, we need to establish a centre of excellence that will help in the migration from IOCs,” he explained.
Also reacting to the need for scenario planning and the possibility of galvanising the private and public sector to work together to increase the value of oil and gas to the economy, as proposed by Utomi, the DPR henchman noted that the agency had transformed from mere regulator to business enabler and opportunity provider and was working to maximise the value of the sector to the economy.
Auwalu maintained that as a business enabler, DPR was after creating an enabling environment for operators to work, produce, make returns on their investments and pay taxes and royalties to the government as while providing employment to Nigerians.
Strategic regulators and other stakeholders have expressed satisfaction with the pace, quality and magnitude of work carried out by the Hydrocarbon Pollution Remediation Project (HYPREP) in Ogoniland, in line with the recommendations of the United Nations Environment Programme (UNEP).
In their separate speeches at the 2025 4th quarter key regulators / asset owners meeting held in Port Harcourt, the strategic stakeholders commended HYPREP for the significant milestones achieved with excellent efficiency and transparency, demonstrating capacity and commitment to sustaining collaboration with development partners for the overall success of the Project.
The regulators particularly lauded HYPREP for the landmark success in the implementation of the land and shoreline remediation, mangrove restoration, provision of reticulated potable water, the various sustainable livelihood programmes, donation of ambulances to health facilities in Ogoni, the construction of Centre of Excellence for Environmental Restoration, as well as the ongoing Ogoni Power Project, adding that their independent field reports have shown proofs of HYPREP driving even beyond its mandates.
The goodwill messages were made by representatives of the National Oil Spill Detection and Response Agency (NOSDRA), Centre for Environment and Human Rights Development (CEHRD), Society for Women and Youths Affairs (SWAYA), Stakeholders Democracy Network (SDN), Nigerian Pipelines and Storage Company (NPSC), and Federal Ministry of Environment. Others are the Rivers State Ministry of Environment, the Rivers State Ministry of Health, the National Upstream Petroleum Regulatory Commission (NUPRC), the Rivers State Ministry of Power, the Rivers State University, the Rivers State Ministry of Water and Rural Development, and Renaissance Africa Energy Company Limited.
Following the Monitoring and Evaluation Unit’s presentation on the status of HYPREP projects, participants offered feedback on areas of concern. They reassured HYPREP and the people of Ogoni of their continued support for the Project’s success. They also suggested that the quarterly review meeting be sustained as it enables them to report, evaluate and proffer solutions to areas of concern.
Participants also commended HYPREP for improved community and stakeholder engagement and for adding to what they saw the previous time. “We commend HYPREP for the quality work done at sites. The progress is phenomenal, because HYPREP is scoring good grades, above average,” Prof. Iyenemi Kakulu from Rivers State University said.
In his speech at the event, the Project Coordinator of HYPREP, Prof Nenibarini Zabbey, who was represented by Prof Damian-Paul Aguiyi, Director of Technical Services, commended the regulators and asset owners for their cooperation with the Project, and for making themselves available for fieldwork and the regular review meetings.
Prof Zabbey reiterated HYPREP’s commitment to best practice in waste management, particularly waste generation and disposal, calling on the Regulators for adequate logistics support, saying HYPREP’s priority is to focus on the core recommendations by UNEP, especially, remediation(soil, shoreline) mangrove restoration, provision of potable water, interventions in public health care services and sustainable livelihood for the people.
The Project Coordinator further highlighted the status of the Project, the successes achieved across all thematic areas, and assured that HYPREP will soon complete most of the ongoing projects and roll out others. He explained that the purpose of the meeting was to review the progress of the Ogoni cleanup, ensure quality control, and foster effective collaboration.
Consequently, the quarterly key regulators/asset owners meeting is HYPREP’s strategic stakeholder management model, further underscoring the Project’s commitment to transparency, partnership for development, and accountability, all of which are harbingers of effective project delivery.
Speaking to newsmen, HYPREP Project Support Lead and representative of Renaissance Africa Energy Company Limited, Engr Ehioze Igbinomwanhia, described his involvement with HYPREPas an encouraging and insightful experience, saying, the Project is implementing a wide range of projects across Ogoniland, spanning immediate remediation works as well as livelihood support initiatives aimed at improving the welfare of affected communities.
Engr Igbinomwanhia emphasised that Renaissance Africa Energy remains fully committed to supporting the objectives of the Ogoni cleanup project, noting that the company has a long history of collaboration with HYPREP.
He added that the partnership has been characterised by continuous learning, adaptation and a willingness to respond to observations and recommendations aimed at improving outcomes.
He further emphasised the importance of safety in all project operations, particularly given the challenging terrain and operating conditions in Ogoniland.
He noted that safety is treated as a critical priority and that contractors are continually reminded to maintain high safety standards, stressing that lessons learnt from previous operational challenges like the collapse of the water tank in Gwara Community are being applied to strengthen safety practices and overall performance.
The Rivers state Government has identified six local government areas with the highest burden of maternal and Neonatal mortality in the state.
State Commissioner for Health Dr Adaeze Chidinma Oreh said this in an interview with newsmen at the Maternal and Neonatal Reduction innovation initiative ( Mamii)Rivers state activation workshop and state engagement meeting in Port Harcourt.
The event was organized by The Federal Ministry of Health in conjunction with its Rivers state counterpart in Port Harcourt.
Dr Oreh also restated the preparedness of the state government to support current efforts by the federal government towards the reduction of maternal and infant mortalities in the country.
She mentioned the affected Local Government Areas to include, Andoni,Akuku Toru and Ahoada West
The rest according to the Commissioner are, Bonny, Etche and Emohua Local Government Areas.
She said the workshop will enable the team from the federal ministry of health and social welfare to brainstorm with the view to finding solution to the problem.
The Commissioner also gave reasons why the Mamii initiative was the best as far as finding solution to maternal mortality was concerned.
“The uniqueness of the Mamii initiative driven by the federal ministry of health and social welfare was that we used evidence to elicit the reasons for this deaths, so that the solutions will be context specific and tailored to the particular environment where those deaths are occuring
“For us in Rivers state we have six Mamii LGAs , nationally we we have 172 local government areas “the Commissioner said.
Earlier in her opening remarks,Dr Oreh said the state government is prepared to work with the federal ministry of health and social welfare to check the rate of maternal mortality in the state.
She commended The Minister of Health and Social welfare Professor Ali Muhammad Pategi for driving the Mamii initiative across the country and expressed optimism that the programm will see to the end of maternal mortality in the country.
Also speaking the National Coordinator Nigeria health sector Renewal Initiative Dr Adam Ahmed said Rivers state is the last state among Mamii states in the country to host the team.
He said the team will visit the affected Local Government Areas with the view to interacting with the people on how to check the trend.
He expressed the hope that with continuous efforts, maternal mortality will be checked.
Also speaking the permanent secretary Rivers state Ministry of Health Professor Justinah Jumbo said the government is not leaving any stone unturned towards reduction in maternal deaths.
The permanent secretary said Governor Siminalaye Fubara is a health friendly Governor who is desirous in improving the quality of health of Rivers people.
John Bibor
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