PRESIDENT Bola Tinubu on Tuesday justified the government’s decision to remove the petroleum subsidy, saying it is a step towards securing the country’s energy future and economic growth.
He maintained that the petroleum subsidy has, over the years, strained the country’s economic resources, leading to inefficiencies and hindering its ability to invest in critical areas of energy security.
The president gave the justification while delivering his keynote address at the 7th edition of the Nigeria International Energy Summit (NIES) in Abuja.
“The petroleum subsidy has, over the years, strained our economic resources, leading to inefficiencies and, most importantly, hindering our ability to invest in critical areas of energy security.
“By removing the subsidy, we are creating a more transparent and accountable energy sector,” he said.
Speaking through the Minister of Information, Mohammed Idris, the President noted that the removal has encouraged further private sector participation in the energy industry with potential of attracting more local and international investors, fostering innovation and competition that will drive down costs and improve the overall efficiency of the country’s energy sector.
He further stated that the funds that were previously allocated to subsidising petroleum products are now redirected towards developing and upgrading energy and other social infrastructure.
However, he noted that although the move may have had its impact on Nigerians especially the lower income earners, his administration is committed to implementing social intervention programmes to mitigate the short-term effects on the vulnerable population.
According to him, the programmes will ensure that the burden of the subsidy removal is shared equitably and that the most vulnerable are protected.
Similarly, he said:”The decision to remove the petroleum subsidy is not an easy one,” but it was imperative for the long-term energy security and economic prosperity of Nigeria.
Earlier in his address, the Minister of Petroleum Resources (Gas), Ekperikpe Ekpo disclosed that one of Nigeria and Africa’s biggest gas transmission systems, Obiafu/Obrikom/Oben (OB3) will be completed by March 2024.
The pipeline, according to him, is a vital piece of gas infrastructure for the supply of feedstock to the Ajaokuta-Kaduna-Kano (AKK) pipeline.
Once completed, the Minister stressed that the 42” 127 km pipeline will supply 2BCF daily and provide the AKK pipeline with gas from the three fields of Obiafu, Obrikom, and Oben.
Similarly, he stated that the Ministry was accelerating the deployment of gas-fired power plants and working with its counterparts at the Ministry of Power to ensure the reliability of gas supply to enhance the optimal availability of electricity nationwide.
“This goes hand-in-hand with encouraging private sector participation in the power sector through attractive investment frameworks and incentives,” he said.
Secondly, he said the Ministry is promoting the use of natural gas as feedstock for industries, reducing operational costs and enhancing competitiveness.
“We are doing this by facilitating the establishment of gas-based industries to create more employment opportunities and boost economic growth.
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“We will continue the development of the necessary infrastructure to ensure widespread access to clean and affordable natural gas for domestic consumers and encourage the adoption of compressed natural gas (CNG) and liquefied petroleum gas (LPG) for transportation and household use, respectively,” he added.
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