THE Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has outlined the benefits

of subsidy removal to Nigerians and the economy.

The minister, who spoke at a town hall meeting recently in Lagos, said “the discon-tinuation of fuel subsidy is because it poses a huge financial burden on the government, dispro-portionately benefits the wealthy, encourages inefficiency, corruption and diversion of scarce public resources away from investment in critical infrastructure.”

She was of the opinion that subsidy removal would save additional resources for  programmes targeted at mitigating poverty and spurring economic growth.

She noted that since 2000, the government had issued 20 licenses to build new private refineries and none of them had resulted in construction of new refineries. She claimed that deregulation of the downstream sector of the petroleum industry would lead to rapid private sector investment in refineries and petro-chemicals, which will generate millions of jobs and increased prosperity for Niger-ians.

According to her, “the total projected subsidy reinvestible fund per annum is N1.134 trillion based on average crude oil price of $90 per barrel. Out of this, N478.49 billion accrues to the Federal Government, N41.03 billion to state government, N203.23 billion to local govern-ments, N9.86 billion to the Federal Capital Territory (FCT) and N31.37 billion as trans-fers to derivation and ecology, development of natural resources and stabilisation funds.”

The minister said a robust programme structure has been developed to ensure adequate oversight, accountability and implementation of the various projects, which accruals from subsidy removal would be used for to mitigate the subsidy removal impact.

The Managing Direc-tor/Chief Executive Officer, Oil and Gas Free Zone Authority, Dr Noble Abe, who spoke at a forum in Lagos, said data from petroleum marketers association, showed “$10 billion is expended annually by the country in importing PMS alone.”

He said that Nigeria’s biggest problem had been the huge percentage of its income that was spent importing refined petroleum products. He pointed out that “oil and gas apart from providing fuel, constitutes important raw materials for production of different products.”

He said: “unknown to many Nigerians, oil and gas is a very important raw material and its use is not limited to powering generators and driving cars. Over 6,000 products can be identified as made from petroleum; therefore, exportation of mineral resources in its raw form undermines industry, job creation, the availability of raw materials for secondary industries, transfer of technology and contributes to fuelling social ills.

“Our goal should, therefore, be to add value to our greatest resource which is one of the most important raw materials known to man. The quantum effect of this will totally transform our economy in little or no time and help to resolve most of the problems we are experiencing as a nation today.”