Subsidy on kerosene to remain - Minister

Mrs Diezani Allison-Madueke
The Nigerian Minister of Petroleum Resources,

Subsidy on kerosene to remain - Minister
Hauwa Noroh Ali, Abuja

The Nigerian Minister of Petroleum Resources, Mrs Diezani Allison-Madueke, says kerosene would not be affected in the government’s proposed removal of subsidy in the oil sector.

Allison-Madueke gave the assurance in Abuja at an interactive session with members of the Senate Committee on Gas Resources led by Senator Nkechi Nwaogu.

The minister said that although kerosene subsidy was totally inefficient and problematic, the government could not, in good conscience, deregulate the product at this time.

She explained that the reason was due to the fact that the government did not have an alternative fuel to give to the Nigerian masses for domestic use.

“The decision was borne out of empathy for the masses because we have tried to make subsidy efficient with various controls.

“We have also tried to reform our regulatory parastatals much tighter. 

“We land kerosene at about 135 Naira we sell to the middleman at 40 Naira, which means we are subsidising kerosene for 90 Naira and yet it is reaching the consumer at between 85 Naira  and 90 Naira, ’’ she noted.

Economic impact

On gas, the minister maintained that all efforts must be geared toward ensuring efficient distribution of gas because it has the potential to catalyse the economic transformation of the nation.

She said that Nigeria had a production capacity of almost eight billion cubic feet of gas per day, disclosing that only 12 per cent was being consumed locally.

Allison-Madueke pointed out that 15 percent was flared wastefully, 41 percent dedicated to export and 32 percent re-injected and used operationally in the oil and gas sector.

Concerted measures

The minister told the committee that there must be concerted measures within the next 30 months to provide Nigerians with gas as the commodity was in abundant supply, but lamented that distribution was a problem.

“We have already developed a very in-depth strategic plan of schedule and are in in-depth discussions with the various operators as this will be private sector-driven in terms of distribution.

“We need to sort out the issue of canisters, cylinders and which groups to give it out to for free and how much it would cost us. We are looking at a lot of modalities with the various investors,’’ Allison-Madueke said.

Gas as alternative

She expressed optimism that other crude products could be overtaken by gas if the enabling environment was provided as gas was a new field within an old sector that could be greatly explored.

Earlier, Nwaogu expressed concerns that Nigeria was the sixth largest producer of gas in the world and yet more Nigerians were using firewood to cook.

“This continuous use of wood is adding to the depletion of our forest and we all know the effect this would have on climate change,’’ Nwaogu said.

She stressed the committee’s readiness to work closely with the ministry, NNPC and other relevant agencies to enact relevant laws to transform the sector.

Williams/Ekata