Governors have described as
unsustainable, payment of oil subsidy to marketers by the Nigeria National
Petroleum Corporation (NNPC).
The governors called on the
federal government to do away with it, saying fuel subsidy is a drain on the
nation’s resources.
Kayode Fayemi, chairman of the
Nigeria Governors’ Forum (NGF), made the demand when he led a delegation to
Mele Kyari, the new group managing director of the corporation.
He said subsidy remains a major
drawback on government revenues, adding that there is need to consider a new
deal on how government will absorb its cost.
This he said has become necessary
given the new reality of low oil revenues and rising government commitments.
“It is important to highlight
that subsidy remains a major drawback on government revenues. We may need to
consider a new deal on how governments will absorb the cost of subsidy,” he
said.
“This has become necessary given
the new reality of low oil revenues and rising government commitments. We
believe that at the current course, subsidy costs will continue to offset any
recovery in the oil market. The country recorded one of its lowest cost of
subsidy in 2016 when oil traded at an average of US$48.11 pb. Total subsidy
that year was around N28.6 billion; but the amount rose to N219 billion in 2017
and N345.5 billion by mid-2018, as the price of oil and domestic PMS
consumption rebounded.These are important considerations for us, with direct
implications on energy security and economic stability in the country.”
The NGF chairman said having
worked with Kyari when he was minister of mines and steel, he believes that the
NNPC GMD is a man of integrity who would deliver on his promises to the nation.
Governors are the latest to
oppose fuel subsidy. Last month, Muhammadu Sanusi, emir of Kano, asked
President Muhammadu Buhari to end fuel subsidy. He had said “N1.5 trillion on
subsidy is N1.5 trillion out of education“.
Six days ago, Stuart Symington,
US ambassador to Nigeria, also advised the federal government to get rid of
fuel subsidy.
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