Unrealistic To Continue With Subsidy Regime, Minister of Petroleum Discloses

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The Minister of State for Petroleum Resources, Timipre Sylva has said that it was unrealistic for the government to continue with the subsidy regime, especially with the Premium Motor Spirit (PMS) otherwise known as petrol, as it had no economic value.

He made this disclosure in a press statement on Thursday, July 9, 2020, in Abuja while asking Nigerians to ignore the misinformation and misguided comments that have been in the public sphere on the issue.

‘’It has become expedient for the Ministry of Petroleum to explain misconceptions around the issue of Petroleum Products Deregulation.

Read also: Nationwide Blackout Looms As Nigeria’s Jaded Electricity Grid Collapses Again

After a thorough examination of the economics of subsidizing PMS for domestic consumption, the government concluded that it was unrealistic to continue with the burden of subsidizing PMS to the tune of trillions of Naira every year. More so, when the subsidy was benefiting in large part the rich rather than the poor and ordinary Nigerians.

Deregulation means that the Government will no longer continue to be the main supplier of Petroleum Products, but will encourage the private sector to take over the role of supplying Petroleum Products” he said.

He pointed out that in line with global best practices, the price of petroleum products will be determined by market forces. He, however, added that the government will continue to play its traditional role of regulation and ensure that it was not priced arbitrarily by private sector suppliers.

Sylva said that the regulatory function will be similar to that played by the Central Bank of Nigeria in the banking sector where they try to make sure that deposit money banks do not charge arbitrary interest rates on its customers.

‘’Indeed, one of the reasons we have been unable to attract the level of investments we desire into the refining sector has been the burden of fuel subsidy. We need to free up that investment space so that what happened in the Banking Sector, 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. Let us, therefore, ignore the antics of unscrupulous middlemen who would want status quo ante to remain at the expense of the generality of Nigerians,” he added.

He disclosed that the deregulation policy will attract more investments into the oil sector, create more jobs and opportunities, and free up trillions of naira to develop infrastructure instead of enriching a few Nigerians.

The minister noted that the government who is mindful of the impact of higher PMS prices on Nigerians is working to roll out the autogas scheme which will provide citizens with alternative sources of fuel at a lower cost.

 

Babajide Okeowo
Babajide Okeowohttps://newdiplomatng.com/
With a career spanning over a decade spent across the Business, Political and Entertainment beats of prominent media organizations in Nigeria, Babajide Okeowo has carved a niche for himself as a Journalist of repute. As a newsroom guru, he has penned several weighty narratives and designed content that speak to a news medium's values, vision and mission while ensuring that the content resonate pretty well with a variety of critical audiences across Nigeria and beyond. A consummate storyteller whose coverage of the business industry is valuable, Okeowo is blessed with a vast analytical mind and data interpretation skills. In his spare time, he interprets data for a Leading American University while also volunteering for a Non-Governmental Organization on Mindset Transformation. Okeowo is the Content Editor of The New Diplomat.

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