Minister of State for Petroleum Resources, Chief Timipre Sylva,has said that the best option for Nigeria is to end payment of subsidy on petrol.
The Petroleum Industry Bill(PIB) passed by the National Assembly he said, had no provision for subsidy, adding that President Muhammadu Buhari’s assent to the bill will finally put subsidy to rest in Nigeria.
Sylva spoke at the Nigeria/Organisation of Petroleum Exporting Countries: 50 Years of Partnership press conference in Abuja.
He said:“This (subsidy removal) is desirable for the interest and growth of Nigeria. Of course, everybody will have their perspectives, but from where I sit, I believe that subsidy removal is the best thing for Nigeria, not just the industry. So far, the discussions with stakeholders are still ongoing. But I will also bring it to your attention that today, when the President assents to the PIB, subsidy will become a matter of law, because it is already in the PIB that petroleum products will be sold at market determined prices.”
He added that removal of subsidy has the potential of unlocking a lot more funds for deployment to development.
He hinted that the government would begin the rehabilitation of the Warri and Kaduna refineries soon in order to increase domestic refining of petrol and to cushion the impact of subsidy removal.
He said the OPEC quota given to Nigeria for crude oil production in June 2021 was 1.554 million barrels per day and that the quota system had helped in balancing oil prices globally.
He hinted that the government would begin the rehabilitation of the Warri and Kaduna refineries soon in order to increase domestic refining of petrol and to cushion the impact of subsidy removal.
He said the OPEC quota given to Nigeria for crude oil production in June 2021 was 1.554 million barrels per day and that the quota system had helped in balancing oil prices globally.
He emphasized that Nigeria’s membership of the Oganisation of Petroleum Exporting Countries, (OPEC) has been a win-win for both parties in the last 50 years, stressing that without the group international oil market would have been in chaos.
According to him, “the decision by Nigeria to become a member of OPEC has enhanced the development of the oil industry in the country, enabled the country to influence the growth and contribute to the survival of the industry globally, as well as placed the country among the comity of nations engaged in the noble duty of stabilizing the oil market for the benefit of all – producers, consumers and investors alike.
“The relationship between Nigeria and OPEC, without doubt, has been of mutual benefits to both parties.
“On the one hand, it has supported the growth of the oil industry in Nigeria through the harmonization and adoption of relevant policies among OPEC Member Countries, as well as through the sharing of knowledge and technical expertise. Nigeria has also benefited greatly from the efforts of OPEC to stabilize the oil market taking into consideration that the economy of the country is highly dependent on revenue from oil.
“On the other hand, Nigeria has also contributed enormously to the survival of the OPEC through turbulent times, by lending full support to the efforts of the Organization to balance and stabilize the oil market.”
He said Nigeria in the past 50 years has produced six Presidents of OPEC conference and four OPEC Secretary Generals including the incumbent, Muhammad Barkindo.
Chief Sylva who noted that last week’s failure by OPEC and its allies including Russia known as OPEC plus, to agree on future oil production level, was not an indication of cracks emerging in the alliance, said very soon a solution would be found.
“The last meeting was deadlocked in a way but that really doesn’t indicate that there is a crack in the OPEC family. In a family it is not the majority that wins. OPEC is a consensus organization. So everybody in the family must agree before we can move forward.
“So if 99 percent of the people are on one side and one percent is on one side OPEC will not still agree and that is really what happened to us in the last meeting. Everybody else has agreed but one country disagreed. They have reasons why they disagreed and we are trying to resolve the issue with them”, he added.
