TheCable

Timipre Sylva, the minister of petroleum resources, says Nigeria needs to move away from the petrol subsidy regime to end its ‘opaqueness’.

Sylva added that Nigeria’s daily petrol consumption figures are ‘crazy’.

The minister, who appeared on the Nigerian Television Authority (NTA) on Tuesday, noted that “there is nothing on the subsidy matter that had not been questioned”.

A co-guest, Yinka Omorogbe, president of Nigerian Association of Energy Economists (NAEE), said that Nigeria must investigate how many litres of Premium Motor Spirit (PMS) it consume and the differential between the landing cost and subsidy, among others.

Reacting to her comment, Sylva noted that the figures fixed for Nigeria’s fuel consumption are inflated.

The implementation of the Petroleum Industry Act (PIA), which made provision for deregulation of the oil and gas industry, may be suspended.

The federal government had proposed an 18-month extension of its implementation — retaining fuel subsidy that gulped N1.4 trillion in 2021. The proposal will go through the national assembly for ratification.

In 2022, the government said it would spend N3 trillion on fuel subsidy payments.

“But we should just sit down and interrogate that subsidy, subsidy price and see what we are paying for it and what’s in the landing costs,” Sylva said.

“There have been efforts at controlling smuggling. And then something dramatic happened. When we had the deregulation discussions, and the price moved up to N162 from N145 where I met it, we realised that the consumption dropped to less than 50 million litres or 40 million.

“So, later on, once the exchange rate also now moved up a little bit and swallowed the gains we made from the N162 move, the figures increased again.

“And sometimes, the figures you hear are crazy. I mean, when they tell you 90 million litres a day, I mean, they’re crazy figures. So I mean, so for me, what is the total of all this? We’ve been interrogating these numbers for 20 years.

“We continue to interrogate these figures because we all know that there is a problem here, it’s opaque.

“The opportunity, the premium is not coming to government and it is not going to the poor people. It is going to a select people who are feeding fat on these things.

“So why don’t we just get rid of this thing? Okay, we should interrogate this thing, but I mean, to me, that is not the solution. Why don’t we just get rid of this whole subsidy so that we know that this problem is over once and for all?

“I mean, we agree that the figures are all opaque. We agree. That’s why we are saying look, let’s stop all the shenanigans. Let’s stop all this discussion.

“Let’s leave all this opaqueness, all this corruption in the subsidy, let us move away from subsidy and go on higher ground. And then they say no.

“There’s been trials of subsidy thieves. We’ve gone on television to say okay, these are the templates, these are the components of the templates.”

The minister said the labour union, which is against the removal of the subsidy, knows the issues, adding that Nigeria continues to haemorrhage because the subsidy regime persists.

“Why don’t we just get out of it? Okay, there has been some corruption. So we can always deal with the corruption issues,” Sylva said.

“We can always deal with all the opaque issues. But should we allow Nigerians who are not benefiting from this thing, as you agree with me, to continue to be haemorrhaging?

“Because we need to get out of this, because look at it, N3 trillion budget. You can imagine if this N3 trillion were to be budgeted for something else. Who’s going to benefit from it? I’m not into the downstream, I’m not going to benefit.”

He noted that even the Dangote refinery would not survive in a subsidy regime, because the businessman carefully planned it as an export facility around the export free zone (EFZ) in Lagos.

“It is by his port because he was not refining to sell at a loss as the other refineries were designed to do. He designed him to sell at a profit internationally,” he said.

“If we are to buy from him, we will also buy at the international market. The only saving we will make as a government, in that case, is the cost of freight.

“So, you find that it was his model, it is still not going to function under a subsidy regime, even Dangote refinery will not function. So, it is agreed that no refinery in the world can survive in a subsidy regime.”