Nigeria: FG Not Contemplating Subsidy Removal, Says Sylva

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Oil field
18 October 2019

Abuja — Admits subsidy payment is inflated Says oil discovered in commercial quantity in Bauchi

The Minister of State for Petroleum, Timipre Sylva, has said the federal government is not in anyway contemplating to remove subsidy, even as he revealed that crude oil has been discovered in commercial quantity in Bauchi State.

Sylva disclosed this yesterday while briefing the Joint National Assembly Committees on Petroleum Resources (upstream) on 2019 budget performance and the proposed 2020 budget.

He said while the subsidy might not be very clearly captured in the 2020 budget, he assured Nigerians that provision was made for fuel subsidy.

Sylva stated: "I want to state that this government is not about to remove subsidy because it is difficult. We believe that as a government, our people are already going through a lot of suffering, and we cannot, as a responsible government, heap the issue of petroleum price hike or removal of subsidy on Nigerians. So it is not on the table at all. We are just looking at how we can manage it. It may not be clearly captured but I can assure you that it is there. If you look very carefully, you will see it.

"We also believe that the consumption that is being posted on the daily basis doesn't represent the actual consumption of the petroleum product in this country. We don't believe that Nigerians are consuming over 60 million litres a day; there is a lot of smuggling and because the petroleum product is cheaper in Nigeria, a lot of our neighbouring countries are taking advantage of the cheaper process in Nigeria.

"So Nigeria is now almost subsidising half of Africa which is very difficult for us to do. And now, you can see the government doing something about controlling some of these leakages, and once those leakages are controlled, we believe that the subsidy can be at least bearable."

The minister explained that the decision of the federal government to shut the Nigeria-Benin boarder has led to the reduction of the daily consumption of fuel in the country from over 60 million litres per day to about 52 million litres per day.

He clarified that the federal government was more concerned about fixing the refineries, which he said would in turn reduce the cost of subsidy on the government, rather than removing the subsidy itself.

Sylva also said work at the Port Harcourt refinery would commence in January, adding that study is also ongoing for the Warri refinery, and assured Nigerians that maintenance work would soon commence.

Asked why Anambra has not been designated an oil producing state, the minister noted that he has no power to declare any state an oil producing state.

He explained that the crude oil has to be produced, and it has to be seen before the state can become an oil producing state.

Sylva stressed that while a lot of people think that Anambra State is a prospective basin especially for gas, he cannot confirm the status of Anambra basin at the moment, but that no production activity is going on there yet, as he promised to find out.

According to him, "Nobody can deny any state such status, because if you are already producing crude oil, such activity cannot be hidden. At least, we will be moving the oil from the state to other areas, then you automatically become an oil-producing state. It is not within the powers of the Ministry of Petroleum to designate any state oil producing. I have announced here today to you that Bauchi is on its way, but it cannot be counted as oil-producing state yet."

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