New Telegraph

FG’s N7trn Fuel Subsidy Projection: Matters arising

Last week the Minister of Finance, Budget, and National Planning, Zainab Ahmed announced that the Federal Government (FG) is set to commit N6.7 trillion on petrol subsidy payments in 2023, despite having a crippling debt profile. Unfortunately, the payment of subsidy results in a fiscal hole, and socio-economic dislocations of cathedral proportions for the populace.


Concerned stakeholders including the International Monetary Fund (IMF) have reacted to the haemorrhage caused to the nation’s till by pushing for the outright stoppage of the payment of subsidies on importation of refined petroleum products. New Telegraph wishes to commend all the stakeholders for their concern over the profound harm done to the future of the populace through the payment of subsidies.


But it is curious that some of the stakeholders who push for the immediate removal of subsidies do not see anything wrong with the continued importation of refined petroleum products.


We find it completely unacceptable that President Muhammadu Buhari, who is also the Minister of Petroleum, and now in the twilight of his eight-year two-term tenure, is unable to end the recurring importation of refined petroleum products.


Apart from the bleeding caused by the importation of refined petroleum products, the country’s economy is further wrecked through the export of employment opportunities which usually comes with the export of crude oil to foreign countries.


The local refining induced employment opportunities do not only exist in the petroleum sectors but also in other sectors including those of manufacturing and textiles as some of the domestic and industrial items as well as the clothes used by humans across the world are produced from crude oil. New Telegraph is aware that the FG has licensed a private oil refinery in Lagos which will soon be in operation.


But a single oil refinery will unlikely satisfy the massive petroleum needs of the country. We urge the citizens of this country to stop their slumbering and begin to exhibit improved political consciousness in order to monitor governance in all sectors including that of petroleum. It is imperative that the Guild of Nigeria Consumers be formed with regard to every sector of the nation’s economy.


The Guild, if formed quickly, should synergize with reasonably nationalistic stakeholders such as the Academic Staff Union of Universities (ASUU), Nigeria Labour Congress (NLC), and the Trade Union Congress (TUC) to push for a multiplicity of players in the petroleum sector, as licensed operators of modular refineries.

Interestingly, some Nigerians including those from the oil producing communities of the Niger Delta Region have refining ingenuity and should be allowed to operate modular refineries.



Modular refineries are usually small in size and have been found to be less complicated to build, maintain and operate. New Telegraph is of the view that the FG should strive harder to rise above parochialism that the local refining of crude oil would be best handled by a single private refinery. Beyond the granting of licences to some Nigerians to operate modular refineries, the FG should go to the extent of giving them financial support for successful op

erations. We recall that the Parliament of Australia approved a grant of $81.8 billion to two oil refineries in the country namely Viva Energy and Ampol. This was aimed at helping the two oil refineries to remain in operation. The referred singular state interventions also helped save 1,250 existing jobs and create 1,750 new construction jobs.


From time to time, the United State of America (USA) extends one form of financial support to her oil refineries totalling 139 so as to help them be in business including sustaining a non-monopolistic operation environment. With many players in the refining arm of the petroleum sector, Nigeria would be able to find a permanent solution to the payment of subsidies on petroleum consumption while earning enhanced revenue.


This would put her in an improved financial state to collaborate with the nation’s universities for the rehabilitation of the four public refineries. The country should be weary of using foreigners for the rehabilitation of the four public refineries. Instead, Nigerian scientists and engineers in the universities and industries across the world with track records in the construction and maintenance of refineries should be made to play a pivotal role in steering the refineries back to life.


Nothing is as humiliating as the status of Nigeria as the only major producer of crude oil in the world without local refining capacity. Africa’s most populous nation could, at best, be compared to a man who lives by the bank of a river and still complains of not having enough water to wash his hands and ends up settling for his spittle. What a humiliation and shame!


With a few months left in office, President Buhari should change the better-disregarded narrative of continued importation of refined petroleum products and make local refining of the same a reality. This is a task that must be done. And it is not rocket science. And there should be no room for alibis.

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