Petroleum Minister Says Subsidy Benefits Only The Rich
By TAYO ELEGBEDE
Following the deregulation of the downstream oil sector and the recent removal of subsidy on Premium Motor Spirit (PMS) known as petrol, the Ministry of Petroleum Resources has come out to say the Federal Government stopped subsidy on petroleum products because it didn’t benefit poor and ordinary Nigerians but rather the rich.
According to the ministry, Federal Government came to a conclusion that it was unrealistic to continue with the burden of subsidy on PMS to a tune of trillions of naira yearly, as it discovered it didn’t benefit the poor and ordinary Nigerians but rather the rich.
Minister of State for Petroleum Resources, Timipre Sylva who disclosed this in a post on the ministry’s Instagram handle said the government also backed off as a major supplier of Petroleum product to encourage the private sector take over the role and that means market forces would going forward determine prices.
The minister remarked that prices of Petroleum products are determined by the cost of crude oil which is the feedstock, hence when crude oil prices were down it ensured through its regulatory function that Nigerians benefited. And that when crude oil cost increases, Nigerians have been made aware it would reflect in prices.
To this end, the government he noted is taking steps to alleviate the burden of higher PMS prices in times to come by working on an autogas scheme, which will provide an alternative and cheaper source of fuel for Nigerians.
Sylva observed that fuel subsidy was one of the reasons why the sector hasn’t attracted the level of investment it deserves, adding that “we need to free up the investment space so that what happened in the banking sector and other sectors can happen in the midstream and downstream oil sector. We can no longer avoid the inevitable and expect the impossible to continue, there was no time government promised to reduce pump price and keep it permanently low.”
The move was therefore to avoid the antics of unscrupulous middlemen who would want the status quo to remain at the expense of the generality of Nigerians.
Noting that apart from attracting investment and creating job opportunities, the policy direction on deregulation was also to free up trillions of naira to develop infrastructure, instead of enriching a few.
The government would however not stop to play its traditional role of the regulator to ensure that commodity is not priced by the private sector suppliers.
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