Nigeria’s Central Bank Governor, Godwin Emefiele, says the Federal Government will put a stop to petroleum subsidy which will be made possible with the coming onstream of the Dangote refinery project. Emefiele said this on Thursday in response to the comment on Nigeria’s foreign exchange policy made by the World Bank President. The World Bank had earlier advised the Nigerian authorities to stop petrol subsidy payments, stressing that it deprives the country of funds for developmental projects. it also criticized Nigeria’s multiple exchange rate systems adding that the bank should float the naira which is trading at N416 against the dollar. Emefiele while at the ongoing meeting in Washington DC, USA, responded that the Nigerian government was not oblivious of the deprivation posed by subsidy but wanted to satisfy local consumption before subsidy removal. He defended the postponement of the removal of the subsidy till when the country is prepared. According to him, the subsidy will be removed by next year when the Dangote Refinery is fully operational.
He said, “When you see people talk about the removal of subsidy, I support it. When people talk about holding on to it till we get the right time, I support it also. You heard the Finance Minister say we decided to defer the policy on subsidy removal till sometime next year when we’re sure Dangote refinery has fully taken off. “What does that mean? It means it is easier for people to find petroleum product and pay in naira, rather than the importation troubles we are going through. You’ll find that the price would be a little bit high and Dangote himself would procure the crude, out of 445,000 barrels per day.”
Nigeria imports almost all of its petroleum products because its refineries are not very functional. The Nigerian National Petroleum Company’s Port Harcourt refinery did not bring in any money in 2019, despite reporting N25.19 billion in expenses. Six directors collected fees totalling N59.65 million, including the Group Managing Director of the Nigerian National Petroleum Company, Malam Mele Kyari. Also, the Kaduna refinery made revenue of N2.278bn but incurred a loss of N241.527bn. This exposes the ineptitude of the Federal Government and the NNPC in managing public oil sector assets.
Former CBN governor, Sanusi Lamido Sanusi, said that Nigeria has gained nothing from the rise in oil prices in the global market. He said that the country will be using the gains from the price increase to pay for the subsidy, which is an impediment to developmental projects. Surely petrol subsidy removal will consequently increase AGO prices. This was contained in a statement made by Malam Mele Kyari. He said this at the presentation of the World Bank Nigeria Development Update, November 2021 edition titled “Time for Business Unusual”. “There will be no provision for it legally in our system, but I am also sure you will appreciate that government has a bigger social responsibility to cater for the ordinary and therefore engage in a process that will ensure that we exit in the most subtle and easy manner.”
Source: Oriental News, ICIR Nigeria, Vanguard NGR
