The Federal Government has highlighted how much revenue the removal of fuel subsidy will bring to Nigeria
Minister of state petroleum resources, Timipre Sylva, while speaking to reporters in Abuja, stated that Nigeria would save over N1 trillion annually due to the removal of fuel subsidy. he also noted that with the deregulation of the downstream sector of the oil sector, it would be easier to woo investors required to revitalise the nation’s comatose refineries soon.
The minister contended that the sustenance of the fuel subsidy regime was no longer tenable as it had always provided the leeway for rich and unscrupulous Nigerians to steal and enrich themselves at the expense of the masses.
Listing the benefits inherent in the policy, he argued that, “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 a trillion and more every year. Already, we have taken up the budgetary provision for subsidy which is about N500 billion in the budget.
“Also, we have taken off the excess forex price that special rate that was given to NNPC 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 now be freed up for development. And, 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.
“And, let us look at subsidy critically. Who are the beneficiaries of subsidy? When a few years ago you have this subsidy scam all over the place all the monies that were taken by all the subsidy thieves and so on, how many poor people were among those people? Subsidy only provides opportunity for rich and unscrupulous Nigerians to steal and enrich themselves at our expense, at your expense.
“So, deregulation is actually a policy direction that is good for the common Nigerian. It is going to produce a lot of opportunities. Before now, you would asked: Why has the refining sector not developed? It is because no refinery can operate commercially in Nigeria with subsidy.
“If you have a refinery and you refine your product and you are expected to sell it at a subsidised rate, how is the refinery going to make profit and survive? So, nobody wanted to invest in refineries. And that is one of the reasons why our refineries became unsustainable as well because they were refining and selling at a loss. So, every time they came back to government to ask for money.
“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.
“And then you can see a lot more investment in that sector and it is going to create a lot of opportunities and jobs for our people. With deregulation, it also means that marketers can import product by themselves and sell at market rates to Nigerians. It is going to create a lot more activities and opportunities.
“So, deregulation is going to really open up. You know what happened in the banking sector with deregulation. We had a few banks but today I cannot count the banks because that sector was deregulated. You see what deregulation did for the airline sector; we had only Nigeria Airways those days.