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Fuel subsidy gulps N10.7t in Nigeria – MOMAN

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NIGERIA has spent a total of N10.7 trillion on fuel subsidy in the last 10 years.

  Chairman of Major Oil Marketers Association of Nigeria (MOMAN), Adetunji Oyebanji stated this while speaking as the guest speaker at the 18th Aret Adams Lecture yesterday.

  According to him, N750 billion was spent on subsidy in 2019 alone in highlighting the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

  “Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole.

It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices.

“A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13 billion in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019,” Oyebanji said.

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