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Nigeria has no alternative to deregulation of downstream oil sector ~minister

By on September 30, 2020 0 110 Views

Nigeria on Wednesday said it could not reverse the increase in petrol pump prices because the alternative will means to return the country to the era of fuel shortage and queue in the filling stations.

Timipre Sylva, minister of state for petroleum who spoke on a TV station on Wednesday said it was impossible to continue with the subsidy regime, in the face of dawdling revenue and its economic implications.

He said the government revenue has declined by as much as 60 percent since the advent of covid-19 and exacerbated by the fall in oil revenue and production cut.

“I applaud the labour leaders who put Nigeria first on that negotiation table. First, we had to be very truthful about the situation in the country, and globally. The government could no longer go on with subsidy because there simply was no money.”

He stated that the labour leaders agreed because they saw the sincerity on the part of the government.
“It was a very painful decision. But there was no alternative. So, we have to bite the bullet as a country,” he noted.

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On the two-week deadline issued by the labour leaders, Sylva said although the organised labour gave the federal government a timeline, the functionality of the refineries cannot be achieved within two weeks.

“I don’t think labour is expecting to see all the refineries fixed in two weeks. Labour is quite realistic. What we told them was that we understand that fixing of our refineries has been a big problem. When we look at it from the historical perspective, the non-functioning of the refineries was because there was subsidy.

“These refineries could not function optimally and commercially. But with deregulation now, we believe that the refineries can now function optimally.
“We believe that this policy (subsidy) direction will help the functioning of the refineries, as well,” Sylva noted.
The minister added that the federal government gave the labour leaders a clear timeline for fixing the refineries, saying that with falling oil prices, government revenue had hit a record low.
“Oil prices came down and production came down as a result of OPEC cuts. We are almost producing half of what we used to and selling at less the price we used to.

“In a situation like that, labour saw the truthfulness. It was a painful decision. Now, there is a consensus that this is the way to go. Deregulation is necessary because it will grow the refining sector. Nobody comes with investment and sells at subsidised rate” he stressed.

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