The minister of state for petroleum resources, Mr. Timipre Sylva, has expressed doubts about the figures bandied as Nigeria’s daily petrol consumption.
Recall that from a daily consumption figure of 38.2 million litres announced in February 2020 by the defunct Department of Petroleum Resources (DPR), the Nigerian National Petroleum Company (NNPC) Limited arbitrarily hiked the figure to 102 million litres per day.
It charges the subsidy on that figure as against the actual consumption rate of 38.2 million litres.
It claimed that Nigeria actually consumes 60 million litres, while the balance of 42 million is smuggled daily to the neighbouring countries of Benin, Togo, Ghana, Niger and Chad.
In 2022, NNPC said the country consumes 65.7 million litres per day, because of increase in crude oil price per barrel in the global market.
But speaking yesterday on NTA’s ‘Good Morning Nigeria’ programme, the minister described as “questionable” the figures published by concerned authorities.
He stressed that complete withdrawal of petrol subsidy would put paid to the fraud.
He said the rich rather than the ordinary Nigerians gain more from the subsidy regime.
“There have been efforts at controlling some of the 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 to the 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 sum 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 is 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 get just get rid of this whole subsidy so that we know that this problem is over once and for all.
“I know when people say the figures are… 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, no, no. There’s been trial of subsidy thieves. Oh, we’ve gone on television to say okay, these are the template, these are the components of the templates,” he said.
The minister maintained that subsidy removal was the best way to attract investments into the oil sector and fight petrol theft.
“We are still very much committed to subsidy removal. It is just the timing that we are saying ok. Let us re-jig the timing. If it was six month, let us be given a longer time. Every other aspect of the Petroleum Industry Act is moving on.”
The minister described as unfortunate the N3 trillion petrol subsidy budget for 2022.
He said the money could have been used to achieve more important things that would have a direct impact on the lives of Nigerians.
“Look at it. N3tn is budgeted. You can imagine if this N3tn was budgeted for something else. Do you know what that means for the country? Who is going to benefit from this?” he asked.
The minister noted that in countries like Kuwait and Saudi Arabia, the petrol subsidy had been scrapped.
Commenting on the moribund refineries, Sylva said he was hopeful that the present government would be able to complete 60 per cent of the repair of the two Port Harcourt refineries before leaving office while the ones in Warri and Kaduna would take much longer.
“We agreed from the very beginning that the completion date will overflow into the next administration but we agreed that there are milestones. We expect that by the end of this year, in Port Harcourt, we expect to achieve at least 60 per cent of the capacity production from Port Harcourt.
“We are hoping that by the end of next year, the rehabilitation will have been completed. Of course, Warri and Kaduna started after Port Harcourt refineries and of course, it is going to progress at a slower pace.
“But I believe that at the end of the year, all the refineries – Port Harcourt, Warri and Kaduna – will be operating at a certain capacity. I cannot tell you what capacity it will be operating by the time we leave but they will all be at least partially functional and we expect that since governance is a continuum, the next government will take up from wherever we stop and get it to the finishing line.”
However, he said even when the refineries are working, they will continue to operate at a loss unless subsidy payment and price regulation stops.
The minister said by the time the Dangote Refinery is inaugurated and Nigeria completes the repair of the government-owned refineries, Nigeria would be producing about one million barrels of refined crude oil per day.
He further said even the Dangote refinery would not survive in a subsidised environment adding that that was the reason the owner 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 his to sell at a profit internationally. 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 own 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,” Sylva added.
