—Says Nigeria’s oil reserves to last another 25 years
19 February 2016, Sweetcrude, Abuja – The Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Emmanuel Ibe Kachickwu has said that the novel price modulation mechanism currently in place will ensure that the Federal Government records zero expenses on fuel subsidy in 2016.
Kachikwu, who stated this while delivering the 45th Convocation Lecture of the University of Nigerian, Nsukka under the theme: The Petroleum Industry and the Future of the Nigerian National-Oil Resource Management and the Implication for National Security & Economic Survival, noted that the zero fuel subsidy regime is already in place and would be sustained based on the prevailing modified pricing template for petroleum products which has eliminated extraneous cost elements.
“Without necessarily removing subsidy the government will spend zero amounts in subsidy in 2016. This may sound unbelievable to some people but that is part of the change agenda of the present administration of President Mohammadu Buhari,” he said while noting that large chunks of vandalized pipelines are being recovered which will supply more crude to the refineries.
The Minister enthused that despite the difficulties of yester-years the oil and gas industry in Nigeria is primed for greater achievements in the months and years ahead as a recent of landmark reforms being engendered and activated by the present administration.
Kachikwu outlined the central objective of the ongoing oil and gas reform agenda to include; increasing revenue for the country through sales of petroleum and petroleum products and taxes on profitable enterprises, maximizing value added on the crude oil and gas to establish linkages with other sectors through local processing and establishment of gas based industries thereby stimulating economic growth and development as well as providing employment opportunities for Nigerians.
“Significant improvement in governance macroeconomic and fiscal policies are key to harnessing oil and gas resources for the sustainable development of Nigeria through enshrining transparency and accountability, empowering good governance and transparency in expenditure and revenue management,’’ he said.
The NNPC GMD also noted that the ongoing reform is designed to create competitive framework for public private partnerships anchored on durable financial investments.
Kachikwu further noted that poor governance and weakness in the fiscal administration of the oil sector led to inadequate allocation, mismanagement, ”Dutch disease” and collection of oil and gas revenues for the government.
He said continuous rise in expenditure when oil revenue was high led to accumulation of large public sector debt. He noted that in previous years, little attempt was made to diversify oil and gas resource income.
Kachikwu said, “For so long, this country has made so much and lost so much to the extent that everybody is uncertain whether oil is a blessing or a curse.”
He gave assurance of his commitment to move the petroleum industry forward saying that with the recent development and technological innovation in United States, Nigeria’s reserve will last for between 20 and 25 years.
The minister expressed appreciation to the Management of UNN for considering him worthy to deliver the convocation lecture, adding that as alumni of the university he would continue to contribute his quota to the growth and development of the University. “Whatever I am today UNN contributed immensely to it, he said.
In his remark the Vice-chancellor of UNN, Prof Benjamin Ozumba said the 45th convocation lecture was unique because the lecture was delivered by a guru in petroleum industry who had within a record time transformed the oil sector.
Describing Dr. Kachikwu as the pride and beacon of UNN, the Vice-Chancellor noted that University is glad to welcome a super lion and one of the profound thinkers in Nigeria.