21 August 2015, Abuja – The United States Government has pledged its readiness to work with the new management of the Nigerian National Petroleum Corporation in achieving the Federal Government’s reforms in the country’s oil and gas industry.
Speaking during a courtesy call on the NNPC’s Group Managing Director,
The Group Managing Director of Nigeria National Petroleum Corporation, NNPC, Dr Ibe Kachikwu has lend his voice to the unsustainability of fuel subsidy in Nigeria noting that it distorts government revenue distribution.
Kachikwu who threw his weight behind the unstainability of fuel subsidy at Nigeria Association of Energy Correspondent, NAEC 2015 conference in Lagos explained that the distortion of government revenue comes as a result of round tripping and unnecessary carryover of expenditures yearly in a way that is difficult for government to control or sustained.
The GMD who was represented by by the Acting Managing Director of National Engineering and Technical Company, NETCO, Mrs Bola Ashafa said subsidy accounted for 20 percent of Federal Government budget in 2015.
“I will want to add my voice to those that have continued to remind us that fuel subsidy is unsustainable. Over N5 trillion was expended between 2006 and 2012.” Kachikwu stated.
The NNPC boss therefore calls for speedy implementation of deregulation policy describing it as essential to the transformation and growth of the downstream sector.
He added that the implementation of the deregulation policy will would go a long way in encouraging inflow of private sector and international investment.
“It will ensure that Nigerians derive fair deal from the abundant petroleum resources in the country through fair product prices for consumer and full cost recovery and reasonable margins for operators.
“Implementation of the policy will entrench efficiency in product usage, product availability and effective competition among investor, hence putting an end to product shortage.
“However, critical enablers such as security of the supply and distribution infrastructure must be assured to guarantee the availability of the petroleum products at affordable prices,” Kachikwu said.
Commenting on Nigeria’s huge importation of fuel into the country, Kachikwu said “we are strategically going to ensure this is no longer the case in the next few years.
“NNPC has resolved to implement a new strategy to transform the Nigerian midstream oil sector into a transparent, efficient and fair market by ensuring the rehabilitation of the brownfield refineries using new business model.”
at the corporation’s headquarters in Abuja, the US Ambassador to Nigeria, Amb. James Entwistle, said his country was willing to provide all necessary support to the new NNPC management to realise its set goals and objectives.
Entwistle, in a statement by the corporation, noted that the job of the GMD of NNPC was about the most challenging job in Nigeria, adding that the US was convinced that Kachikwu had the skills, training and requisite experience to lead the oil and gas industry in Nigeria towards the path of growth and sustainable development.
Commending the US for the pledge of support, Kachikwu reiterated the determination of the new NNPC management to implement the spirit and letter of the President Muhammadu Buhari’s reform agenda in the petroleum industry.
The GMD stated that the new NNPC would be driven by a deep sense of commitment to service delivery anchored on the principle of transparency, efficiency, people, purpose and profit.
“My mission is to re-direct and re-energise the work force for greater value addition and I believe that the NNPC, given the right leadership has what it takes to achieve this objective,” he said.