19 February 2016, Nsukka – The Ferdral government has said it will spend zero amounts in petroleum subsidy in 2016 and would not remove the subsidy while in periods of high oil prices, expenditures were allowed to rise substantially with little ability to control spending in periods of low prices.
The minister of state petroleum resources, Dr Emmanuel Ibe kachikwu, disclosed this at the 45th convocation lecture he delivered at the University of Nigeria, Nsukka titled ‘the petroleum industry and the future of the Nigerian nation’ adding that government has started pumping oil from two out of the three refineries in the country which would be used to provide oil and gas needed for the country.
The minister noted that it may sound unbelievable to people, explaining that it is part of change mantra of the present administration of President Mohammadu Buhari, meanwhile, 70 per cent of vandalised pipelines has been recovered which will supply more crude to the refineries. Dr Kachikwu said that the objective of Buhari reform agenda in oil and gas industry in the country centered around having the right people doing the right hing at the right time for the purposes of moving the country forward.
“With the right people in petroleum sector there will be increase in revenue for the country via sales of petroleum products. The products will be affordable prices at the lowest minimum cost for factor inputs that will encourage economic growth and international competiveness. The reform agenda in the oil and other sectors will also provide more employment opportunities in the country, ‘he said.
The minister pointed out that what the country suffers now was poor management of the oil sector in the past twenty 25 years, adding that in the past the cost of production of crude oil as well as importation of fuel remained the highest in the world while weakness in the fiscal administration of the oil sector led to inadequate allocation and collection of oil and gas revenues for the government.
“In recent past, the oil and gas industry has emerged from the scourge of militancy in the Niger Delta when production was at a low of 1.6 million barrels per day in 2009 to its current levels of about 2.2 million barrels per day. Over the years, little attempts was made to diversify revenue base from huge oil and gas resource income’’ he minister noted.
He also said that the mainstream and downstream have witnessed challenges which was why government has focussed its reforms on libralising the sectors, explaining that Nigeria has three refineries with nameplate capacity of 445,000 barrels per day, 5,120 km of products and crude pipelines, 21 storage depots and one petroleum products import terminal at Atlas Cove all of which have suffered from vandalism and poor maintenance over the years because of lack of a commercially viable framework for cost recovery.
He explained that the oil boom of the 70’s, the country experienced large public spending and fiscal deficits that fuelled macroeconomic vottlity, noting that the countr’s budget increased from the 70’s onwards as expenditure rose faster than revenues.
Kachikwu urged Nigerians to support president Buhari in his fight against corruption in order retrieve the looted funds in the country as the fight would restore the dignity of the county and banish poverty.
“The aim of the present administration is to leave a good legacy through fighting corruption and making judicious use of the country’s resources. Nigerians should give the president maximum support in his determination to rid the county of bribery and corruption’’ he said.
He expressed appreciation to the university management for finding him worthy to present the 45th convocation lecture, adding that as an alumnus of the university he would continue to contribute meaningfully to the university.
In a welcome address, the Vice-chancellor of University of Nigeria, Nsukka, Prof Benjamin Ozumba said that the 45th convocation lecture was a unique one for the fact that the lecture was delivered by an icon in petroleum industry who had within a period of time transformed the oil sector.
Prof Ozumba said that the Nigerian National petroleum corporation (NNPC) has witnessed series of transformation within a short period of time the minister assumed duty in the industry.