Heineken Lokpobiri, Minister of State for Petroleum Resources (oil), has criticised the position of presidential candidates who support petrol subsidy, describing the policy as financially unsustainable for Nigeria.
Lokpobiri spoke on Friday during a breakfast meeting with
media practitioners in Yenagoa, Bayelsa state.
In August, Atiku Abubakar, presidential candidate of the
African Democratic Congress (ADC), said he would restore the petrol subsidy if
elected president in 2027.
On September 28, Peter Obi, presidential candidate of the
Nigeria Democratic Congress (NDC), also said his administration will restore
petroleum subsidy after tackling corruption in the country.
Speaking during the event, Lokpobiri criticised the
positions of both opposition presidential candidates who have expressed support
for petrol subsidy.
“Where would the money come from?” he asked.
“The money is expected to come from the same oil sector.”
Lokpobiri said the subsidy regime consumed resources the
country could no longer afford to spend on keeping petrol prices artificially
low.
“The point I am trying to make is that if that decision was
not made on subsidy removal, Nigeria would have been like Venezuela,” the
minister said.
“God forbid, even Nigeria like Venezuela would not be able
to gather here the way we are gathered today. Venezuelans queue to even buy
bread. That is the level of poverty.”
He said that when President Bola Tinubu assumed office, the
federal government was projected to spend about N18.4 billion daily on petrol
subsidy payments, citing figures previously presented to the national assembly
by Zainab Ahmed, former finance minister.
Lokpobiri also attributed the financial weakness of the
defunct Nigerian National Petroleum Corporation (NNPC) partly to the subsidy
regime, saying the oil company struggled financially before its transformation
into NNPC Limited.
“You recall that NNPC never paid any dividend. NNPC never
made any profit at all. What they were doing was shipping out crude and
shipping in refined products. NNPC was the sole importer of refined products,”
he said.
“If you say you own 60 percent of a business, you also have
to pay 60 percent of the cost of doing that. That is the cash call.
“But before this government came, NNPC couldn’t pay its cash
call. Today, NNPC is not owing any cash call.”
On crude oil production, the minister said Nigeria had the
potential to produce between 2.5 million and 3 million barrels per day but
remained constrained by inadequate crude evacuation infrastructure.
“Our big challenge is that of evacuation. The pipelines
today have all expired. They were used some 50 years ago, but the lifespan of
those pipelines is gone,” he said.
Lokpobiri said thousands of previously shut-in wells could
be brought back into production through re-entry programmes.
However, the minister said increasing output without
replacing the ageing pipeline network could create further bottlenecks.
He said NNPC was working on a comprehensive pipeline
replacement programme under a public-private partnership arrangement.
Lokpobiri added that the project would take some time to
complete, “but once that is done, our capacity will rise astronomically”.
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