‘It’s certain, subsidy to go in 2016’

In an apparent desperate move to shore up the confidence of Nigerians in its ability to turn things around, the Federal Government has begun the process of a downward review of the price of petroleum products in the country, with a view to eliminating inefficiencies in the price regime and also hinting in the same breath, of the removal of subsidy.

This was disclosed on Friday by the Group General Manager, GGM, of the Nigerian National Petroleum Corporation, NNPC, Mr. Bello Rabiu, at an interactive session with journalists in Abuja, shorthly after the National Leader of the All Progressives Congress, APC, Asiwaju Bola Ahmed Tinubu, Friday, in Kaduna, called on the Buhari administration to immediately remove fuel subsidy, insisting that subsidy “comes with so many demons”. The development has however raised suspicion that the APC led government used the Tinubu speech as a kite flying opportunity.

Rabiu also stated that the administration of President Muhammadu Buhari believes that petroleum products were overpriced in the country and that with the eleimination of inefficiencies, prices of products would go below current pump prices.

According to him, the review of the current Petroleum Products Pricing Regulatory Agency, {PPPRA} template show that there are significant inefficiencies in the current template, adding thatit is pertinent that changes in the template are based upon a proper evaluation of the costs of the different elements.

Continuing, Rabiu said a comprehensive study of the costs of importation is being undertaken and that government will be consulting with all relevant stakeholders including the marketing companies and independent experts in order to produce an adjusted template.

“If oil prices continue to fall and if significant inefficiencies are found and eliminated within the template, there will surely be negative subsidy which shall be remitted to the Petroleum Support Fund in line with the PPPRA guidelines.”

He further stated that as being anticipated, when the template is adjusted, there would be reduction in the cost of products, making provisions for subsidy unnecessary in next year’s appropriation.

“We don’t see the need for subsidy to be in the budget in 2016”, Rabiu said.

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