Nigerians, according to the Nigerian National Petroleum Company Limited (NNPCL), have missed out on massive infrastructure development as a result of the country’s protracted fuel subsidy system.
According to the state-owned oil giant, the sum spent on fuel subsidy payments could create 7,500 kilometres of road network at N400 million per kilometre and 37 well-equipped 120-bed tertiary health centres at N32 billion per facility per year.
Lawal Musa, NNPC’s Senior Business Adviser to the NNPCL Group Chief Executive Officer, Mr. Lawal Musa, stated this in Abuja during a joint National Association of Nigerian Students (NANS)/Civil Society Organisations (CSOs) NNPCL Operations sensitisation session.
Musa stated in a presentation titled Petroleum Industry Act (PIA) and the Nigerian Economy that the Federal Government spends up to N4.8 trillion yearly on gasoline subsidies at the expense of Nigerians’ well-being.
According to an analysis of the opportunity cost of subsidy spending, the NNPC official stated that deregulation might result in 500,000 new residences, as well as the education and upskilling of two million Nigerian students.
Musa added that it might bring N12 trillion to Nigeria in four years, while yearly petrol under-recovery would rise to N3 trillion, emphasising that the expense of fuel subsidies outweighed the direct advantages, particularly to the masses.
He stated that deregulation might bring an additional 27,000 megawatts of energy to Nigerians as well as the construction and equipping of 2,400 hospitals in 774 local government areas.
“Nigeria is the largest producer of crude oil in Africa, with 28 per cent of Africa’s reserves, and petroleum plays a significant role in the country’s economy,” Musa said, adding: “The benefits derived have been eroded over time due to the amount paid on subsidy, a regime that has been fueling the country’s vicious circle of poverty.”
He further explained that, despite the global average price of $2.7 per litre, petrol was sold at the lowest price in Nigeria among most West African countries, amounting to N570 per litre.
Verified petroleum demand data, according to him, is vital for national planning and energy security.
The NNPC’s Chief Strategy and Sustainability Officer, Ms. Oritsemeyiwa Eyesan, said that following the provisions of the PIA 2021, the new entity was incorporated as a commercial corporation to be governed like any other private company in the country.
NNPCL’s efforts, according to Eyesan, are guided by three main values: integrity, excellence, and sustainability.
She said that enacting the PIA changed the Nigerian petroleum industry’s institutional, regulatory, and fiscal frameworks, as well as providing an organised method to managing host community development and investments.
Eyesan further explained that the PIA mandated the incorporation of the NNPCL and the establishment of the NNPCL as a fully commercial business.
“Under the Act, NNPCL is required to conduct its operations without the use of government funds,” she said, adding: “The new NNPCL is owned by 200 million Nigerians, with important stockholders including the Ministries of Finance and Petroleum Resources.”
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