Nigeria’s Minister of State for Petroleum Resources, Timipre Sylva, has said that the country will save over N1tn annually by removing subsidy on the pump price of Premium Motor Spirit, otherwise known as petrol.
At a press briefing in Abuja on Thursday, the minister also said that not less than N500bn would be saved from monies budgeted for subsidy in the 2020 budget.
He also insisted that it would be a leeway to woo investors required to revitalise the nation’s comatose refineries.
“What is deregulation going to do? It is going to free up a lot more money. At least from the very beginning, it will save us up to N1tn and more every year. Already, we have taken up the budgetary provision for subsidy, which is about N500bn in the budget.
“Also, we have taken off the excess foreign exchange price that gave the Nigerian National Petroleum Corporation special rate, which also came at a cost. So, all the money that we used to defend the naira at that time to subsidise the dollar will be freed up for development. I believe that going forward, we will begin to see a lot more development, a lot more money available to the government that will be put into critical infrastructure, instead of being burnt in our cars,” he said.
According to Sylva, Nigerian refineries have remained comatose because they have not been operating at commercial level.
He said, “So, deregulation is a policy direction that is good for the common Nigerian. It is going to produce a lot of opportunities. Before now, you would ask: Why has the refining sector not developed? It is because no refinery can operate commercially in Nigeria with subsidy.
“Anytime any part got bad, they had to come back because they were not operating commercially. So, they don’t have money to replace those parts. That was why we were refining and selling at a loss. With deregulation, it means that refineries can operate commercially.”
Sylva alleged plans by some elements to politicise the issue. “They want to politicise everything that they are saying all kinds of things about the policy direction that has been taken, especially at this time.”
