The Federal Government of Nigeria has revealed that investors have been shunning investment in the nation’s downstream oil sector because the cost of petroleum products were not market driven.
According to the government at the centre, this reality would remain until the regime of subsidy is over in the country.
This was disclosed by the Minister of State for Petroleum Resources, Chief Timipre Sylva, while speaking in Abuja at the scorecard series (2015-2023) of the President Muhammadu Buhari-led administration.
Sylva said it was unfortunate that the country is still operating petrol subsidy regime, declaring that it is evident to anyone that subsidy is not sustainable and should be discarded.
The minister noted that investors would keep ignoring woos to invest in the nation’s downstream sector until the price of petroleum products were market driven.
While wondering how possible is it for investors to invest in a nation with subsidized regime, Sylva opined that refinery would not also make profit under the same subsidy period.
He maintained that with a market-driven condition in the downstream oil sector, scores of investors would throng the country to invest, thereby improving the economy.
Canvassing for more refineries in the country, the minister noted that difficulty in accessing petroleum products would be over.
He also emphasised that the Nigerian National Petroleum Company Limited has been selling petrol without gain owing to PMS subsidy.
Recall that had oil marketers stated that the supply hitches in the downstream oil sector that often leads to fuel scarcity, might persist till June, based on the government’s plan to end petrol subsidy in that month.
Last week, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said the Federal Government had budgeted about N3.6tn for fuel subsidy till June 2023.
Sylva, while speaking in Abuja on Monday, insisted that subsidy had been a burden, but stressed that it was a mandate on NNPC which had made the oil firm to continue selling PMS at a loss.
He said the cost of the commodity in Nigeria was not as high as what was obtained in other countries, but stressed that the current national consensus was that subsidy on petrol was no longer sustainable.