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Nigeria’s petroleum minister blames fuel subsidy for faulty refineries
The Minister of State for Petroleum, Timpreye Sylva, blamed fuel subsidy for the poor state of Nigeria’s refineries. He made this comment while defending the plan to repair the refineries.
He said the reason Nigeria’s refineries are not functioning to full capacity is due to the payment of fuel subsidy, so they must be repaired in order to remove the subsidy.
There had been mixed reactions towards the rehabilitation plan.
The government budgeted $1.5 billion for the repair of Port Harcourt refinery. The amount had been trailed by criticism from who who want the refineries sold without repair.
Ripples Nigeria had reported that oil expert, Olagoke Balogun and founder of Stanbic IBTC, Atedo Peterside criticised the move. Balogun said ths government can never operate the refinery successfully
Peterside said industry experts want refinery sold to the private sector without repair, leaving the buyer to bear the cost burden. But Sylva said it is better to concession a functioning refinery than a faulty one.
“Subsidy is one of the reasons why our refineries are not functioning optimally. That constraint will be taken away with deregulation. That is why we must now fix our refineries, so that they can function optimally in a deregulated regime.
“It is better to privatise/concession a functioning refinery than a non-functioning one.” The minister said during a press briefing on Petroleum Industry Bill on Thursday, March 26, 2021.
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