Joseph Thlama Dawha, group managing director, Nigerian National Petroleum Corporation (NNPC), has described the whopping sum of N2 trillion expended on fuel subsidy in Nigeria in a year as ridiculous.
Speaking on Thursday at the 38th Nigeria Annual International Conference and Exhibitions organised by the Society of Petroleum Engineers (SPE) Nigeria, Dawha said the Nigerian people must understand the need to get off this inefficient use of resources, adding that Nigeria has no excuse to import refined petroleum products such as kerosene, petrol and diesel.
Nigeria, Africa’s largest crude oil producer, is arguably the biggest importer of refined petroleum products in the continent, creating a lucrative market for refineries particularly in Europe and the US.
In February, Nigeria brought in its largest kerosene cargo – 292,000 barrels from the United States (US). The country also emerged as the second-largest importer of US jet fuel, according to data released by Energy Information Administration (EIA), the statistics arm of US Department of Energy. Kerosene, which is the cooking fuel of choice for many Nigerians, is being subsidised by the Nigerian government.
But despite the kerosene subsidy regime, retail prices of fuel across the country have been far above the government-approved price of N50 per litre, now ranging from N100 to N250 per litre, depending on the location, with only the NNPC petrol stations and a few retailers in Lagos, Port Harcourt and Abuja selling at the approved regulated price.
“One of the sad issues with Nigeria is that we export crude oil and then import refined products. Similarly, power supply is not enough and we have enormous amount of gas,” said Dawha, who was represented by Timothy Okon, group coordinator, corporate planning and strategy, NNPC, at a panel session on ‘The Changing Global Energy Supply Balance and Africa’s Economic Transformation’.
“Nigeria really has no excuse to import refined products, and the key to that is the need to remove the subsidy regime. It is simply ridiculous to be spending N2 trillion a year on something which is mostly imported from outside the country,” he said.
Commenting on the incentives that are available to invest in gas development and refining , he said the Petroleum Industry Bill (PIB) is coming on stream, adding that “I hope that two provisions in the bill will be preserved. That is section 39, which is gas utilisation, has been expanded to be applicable to oil utilisation with respect to those who want to build refineries. So the terms that are available to gas have been adopted for those who are building new refineries.”
