Why fuel subsidy must go — NNPC

The Nigeria National Petroleum Corporation, NNPC, has said the only way to encourage investors to build more refineries in the country, is to create favourable business environment through deregulation of the downstream sector.

The Group Managing Director of NNPC, Mr. Andrew Yakubu, made the remarks while speaking at a capacity building workshop for energy journalists in Uyo, the Akwa Ibom State capital.

He noted that the current business environment in the sector was not conducive enough to attract investors because there was no guarantee investors would make returns that are commensurate with the investments.

According to him, “the media occupy a very important position in the scheme of things in Nigeria. In fact, globally, the media are part of every nation’s development process, provide the barometer to monitor and ensure that laid down procedures and processes are adhered to in every sector.

“The oil and gas sector therefore is

not left out. The challenges are often misconstrued. However, being a major drive of the nation’s economy and contributing to more than 90% of the country’s foreign exchange; Nigerians have to contend with issues that daily emanate from us.

“There are a lot of challenges in the sector that are often misconstrued and leave room for distortions of information, therefore the workshop is organised to ensure a better understanding of the sector.”

The GMD noted that, “in line with the Federal Government’s aspiration to transform the industry and especially the NNPC into an integrated oil and gas company, on assumption of office, we evaluated the situation of the sector and set out strategies to improve crude oil production.

“It is pertinent to note that Nigeria’s production and export is dependent on four main crude export pipelines – the Trans Forcados pipeline to the west, the Ogbanbiri/Temidaba/Brass pipelines in the centre, the Trans Niger pipeline, and Nembe Creek trunk line to the east respectively.

“When these pipelines are compromised and vandalised, over 500,000 barrels of oil per day are potentially at risk. Being able to produce over 2.3 billion barrels per day in the current challenging environment can be regarded as a big feet itself.

“Consequently, the Federal Government had to intervene with the setting up of a Committee consisting members of the Economic Committee. With the help of the Committee, production increased slightly last year and is currently ramping up. We hope to see further improvement by year end.

“Interestingly, the period saw improvement in the performance of the Nigerian Petroleum Development Company Limited, the NNPC’s flagship exploration and production subsidiary.

“As of today, NPDC is proudly the fifth largest producer of crude oil as well as the leading gas supplier in the country.

Vanguard