Nigeria to save N1tr annually from fuel subsidy removal —Sylva

The Minister of State for Petroleum, Timipre Sylva, said on Thursday the Federal Government would save over N1trillion annually with the removal of subsidy on petrol.

President Muhammadu Buhari had said last week his administration would not reverse its decision on removal of fuel subsidy in the country.

The president, who stated this at a forum in Abuja, insisted that there would be negative consequences if the government continued with the business of fixing or subsidising the prices of petrol.

And the minister confirmed the president’s position on the matter in a chat with journalists in Abuja.

He insisted 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.

He said the money saved from the removal of subsidy would be used to fund other critical aspects of the economy.

The minister stressed that with the deregulation of the downstream sector of the oil and gas industry, it would be easier to woo investors to revitalise the country’s refineries.

Sylva said: “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.

READ ALSO: Nigeria spent N10.4trn on fuel subsidy in 13 years, N1.7trn to supplement electricity tariff shortfalls —Lai

“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 and 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 an opportunity for the 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 the 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 a 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 the government to ask for money.”

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