Baron Ike
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has described the decision of the President Muhammadu Buhari-led federal government to remove petrol subsidy as courageous.
The NNPC boss, who made the remarks during an interview on Channels Television’s Politics Today on Wednesday said subsidy breeds corruption and should be done away with.
According to the GMD, every corruption in the downstream petroleum industry “is one way or the other connected to fuel subsidy.”
Fuel subsidy is a system through which the government cushions the effects of high oil prices at the international market, whereby the government bears the burden of the difference between the landing cost of the refined products and the pump prices in the local market.
The fuel subsidy regime in Nigeria has been fraught with controversies, such that it became a major threat to the Nigerian economy.
Kyari, who backed the decision to fully halt the subsidy regime, said it has been a big issue in the country for many years but the government can no longer afford it because of the economic situation.
“The outburst is very understandable but I also believe very strongly that it is misplaced because Nigerians are not aware of the opportunities lost.
“Every corruption that you are aware of in the downstream industry is one way or the other connected to fuel subsidy,” the NNPC boss said.
Government’s decision to fully halt subsidy has seen the price of fuel rise to N160-61/litre, eliciting criticisms from organised labour, the opposition and many Nigerians.
But the GMD, who commended the Buhari-led government for fully implementing the removal of petrol subsidy, said that poor Nigerians have much more to benefit from that decision, as subsidy is beneficial only to the rich.
“It requires courage to make this decision; I can share this with you. Only a Buhari regime can make this decision.
“The subsidy in itself is by every means an elitist thing and I can share this with you. It is only the elite that will have three, four, five cars in their houses, fill their tanks and also feel comfortable doing this.
“The ordinary man is not the beneficiary. First, he loses in infrastructure, hospitals are not built, schools are not built and ultimately, the brunt of the corruption in the downstream sector will be transferred to the ordinary man. So, overall, you lose everything.
“It is very understandable for people to get angry that prices have gone up. Just like the prices of every commodity, when it goes up, there can be difficulties and challenges that people will naturally face but once prices go up, the other natural thing that must happen is that your income needs to increase so that you are able to procure the things that are now delivered at higher prices”, the GMD stressed.
The NNPC boss noted that those who are opposing the subsidy removal were ignorant of the benefits to them and other Nigerians.
He added: “When people get angry, this is coming from people who practically are not aware of this situation and they are not aware of the loss that they have and most importantly they are being engineered into making those statements, and we understand this perfectly.
“We are the national oil company; it’s our role to ensure energy security. But you can’t do this until you are able to deliver cost. And that cost is lost daily as prices of crude oil go up and you are unable to do many things”.
On the state of the nation’s refinery, Kyari explained that plans were underway to rehabilitate the four major refineries in Kaduna, Port Harcourt and Warri to maximum capacity.