The decision to finally end the fuel subsidy regime in Nigeria was taken in the best interest of ordinary Nigerians.
The group managing director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, who disclosed this, said it would free up funds for the various tiers of government to develop critical infrastructure in education, health, transport and other sectors for their benefit
Kyari made the clarification on Wednesday, April 8, 2020, during an interview with Channels TV.
“We decided that fuel subsidy/under-recovery has to be stopped, subsidy is an elitist thing because it is the elites that benefit from it”, he said.
“They are the ones that have SUVs, four, five cars in their garages. The masses should be the ones to benefit. There are many things with the under-recovery because it makes us supply more than is needed.
“The stoppage of subsidy or under-recovery payment will ensure monies are freed up for the government to fund critical infrastructure project such as education, health, roads, and many others, for the benefit of the ordinary man.
“There are many things wrong with the under-recovery because we are supplying more than we need, we are supplying the whole of West Africa. Therefore, the under-recovery itself is so over-bloated because we are subsidizing the whole of West Africa. That has to stop.’’
Mr. Kyari pointed out that the removal of the subsidy would automatically correct the distortions it created in the market such as smuggling and products arbitrage. This will also encourage to establish retail outlets in the neighbouring countries.
The full deregulation of the downstream sector is also expected to attract more investments, as corporate organizations and multinational oil firms, who hitherto were reluctant to invest in refineries will be encouraged to do so.
Reacting to the agitation for price reduction of kerosene, the NNPC boss said the corporation was focused on how to get all those that were still using kerosene for domestic cooking to start using Liquefied Petroleum Gas (LPG) which is popularly referred to as cooking gas.
Stressing that LPG is a cheaper, safer and more environmentally friendly fuel than kerosene, Mr. Kyari admitted that the Minister of State for Petroleum Resources, Mr. Timipre Sylvia, is leading the campaign for the formulation of policies that would deepen the adoption of LPG usage for domestic consumption.