Emmanuel Ibe Kachikwu, the group managing director of the Nigerian National Petroleum Corporation (NNPC), is asserting that Nigerians want fuel subsidy to be removed.
Kachikwu said the removal of subsidy would not cause protests as observed in January 2012, emphasizing that over 90% of Nigerians do not benefit from the subsidy regime.
NNPC boss was speaking in an interview on Arise Television on August 26, Wednesday.
He also disclosed the corporation would explore third party financing to increase the capacity of the refineries to 80% within a 12 to 18-month period.
“The truth is the over 90 per cent of Nigerians today are really not enjoying subsidy. Subsidy is likely in the big cities like Lagos and Abuja and mainly for the rich because the subsidy element does not trickle down to the hinterland and those who are poor,” he said.
Meanwhile, Kachikwu noted that rather than deal with subsidy in the sense of absolute removal in the way it is known, the NNPC would generate ways to remove the perception of subsidy.
He added: “Right now, for example, we have not removed subsidy but petroleum products are selling at market prices due to inefficiencies in the system and people are buying those products and avoiding queues.
“We have got to be intelligent about it; the truth is that as the oil price continues to drop, we are going to face the reality of our time, which is survival.”
He stated that the NNPC stopped the Offshore Processing Agreements (OPAs) with oil dealers so as to have the chance to look at the contracts and make them more see-through for Nigerians to get better value than they are getting from the existing contracts.
Kachikwu added that the target was to raise the refining capacity from the current 30 to 40 % to 80 % in the next 12 to 18 months.
“I think the reality is that we lose money for each barrel you put into the refineries because our system is not working efficiently and the equipment is down. The plan is that when you get investors, you get the system cleaned up,” he stated.
NNPC director also hinted that the oil corporation was on the road to raise full funding for Train 7 of the Nigeria LNG, emphasizing also that the corporation would explore the possibility of getting long-term funding for other LNG projects in the pipeline.
Recall, in 2012, the government tried to end subsidies by doubling the price of a litre of petrol overnight, angering citizens who argued that low prices are the only benefit they have by living in the oil-rich nation. The government backtracked on its decision following riots.
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