FG Can’t Sustain Subsidy Payments, Minister Insists …RSG Explains Stance On Pro-Subsidy Removal

The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, yesterday said that the Federal Government could no longer sustain payment of subsidy to oil marketers.
She said that there was the need to deregulate the downstream oil sector to attract investors.
Alison-Madueke made the observation at the ongoing Nigeria Oil and Gas Conference in Abuja.
She said that in considering the deregulation of the downstream sector, government must strike a balance in implementing some of its policies to meet the needs of Nigerians.
According to her, subsidy payable to marketers on imported refined petroleum products cannot be sustained.
“Now that reforms in power sector are underway, the next focus should be reforms in the downstream sub-sector.
“The continued regulation of the downstream sector has its positive and negative impact 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 did not benefit the poor it was targeting, but rather it is benefiting the rich.
“The industry needs to move to next level by increasing revenue and curb oil theft and pipeline vandalism,” she said.
Alison-Madueke, said that the nation had been faced with fuel scarcity in the last two months and there seemed to be no end sight in spite of assurances by the Nigerian National Petroleum Corporation.
She blamed the current fuel scarcity on sabotage, diversion, hoarding, panic buying and rumours of imminent pump price increase.
The minister also outlined challenges confronting the government to include perennial oil theft, pipeline vandalism and non passage of the Petroleum Industry Bill (PIB).
She said that in spite of these challenges, the country still maintained a stable 2.3 million barrels per day production of crude oil achieved in 2013.
The minister said that the country had the capacity to boost production to three million barrels per day.
She said that gas production had also increased from 6.3 trillion standard cubic feet per day to 8.1 trillion standard cubic feet per day in 2013.
Meanwhile, the Rivers State Commissioner for Finance, Dr Chamberlain Peterside says the state government is against retention of petroleum subsidy because it is a drain to the nation’s purse.
He told newsmen in Port Harcourt at the weekend that so far, the subsidy payment has impacted negatively on the economy rather than improving it.
In the words of the commissioner, “quite frankly, we believe that any economic policy that is hampering development of Nigeria should be reconsidered and possibly eliminated’’.
Peterside disclosed that at the last meeting of the Revenue Mobilisation Allocation Committee meeting at Abuja, the Forum of State Commissioners of Finance restated their stance against the subsidy payment policy.
He pointed out that over time, the huge funds paid to petroleum products importers impedes long time progress the country would have made in economic development, “you can’t be paying subsidy on kerosene and fuel when you don’t see the impact”’.

Rivers State Commissioner for Information and Communications, Mrs Ibim Semenitari (left), Permanent Secretary of the ministry, Mrs Cordelia Peterside (middle), and Permanent Secretary, Ministry of Finance, Mrs Alaliba Dokubo at the special kick-off meeting for the groundbreaking ceremony of the new Nigeria Union of Journalists’ Secretariat Complex, at the Ministry of Information and Communications’ Conference Room, yesterday. Photo: Chris Monyanaga