Tinubu urges FG to deregulate oil sector, discontinue subsidy

Says Nigeria spent $5bn on subsidy in 2008 

Posted by Vanguard on Tue. 3rd July, 2019

By Dave Oso 

The calls for the Federal Government to take concrete steps towards deregulating the oil and gas industry, as well as ending the controversial fuel subsidy resonated yesterday at the oil and gas conference and exhibition in Abuja.

Speaking at the conference, Managing Director of Oando Plc, Mr. Wale Tinubu urged  the Federal Government to, as a matter of urgency, deregulate the oil sector, lamenting that Nigeria spent $5 billion on fuel subsidy last year, a sum he said could have been used to finance other critical infrastructure needed by vast majority of the populace.

Tinubu said stakeholders in the petroleum industry should support the deregulation to engender national growth.

Tinubu said: “The government has chosen to effectively subsidise the price as a social palliative. Not that I support it, but we spent $5 billion last year on subsidy, which was even more than what we spent on education and housing combined.’’

According to him, other critical sectors of the economy like education and health, among others, were in dire need of funding.

He said: ”Such amount expended on subsidy should have been directed to other critical sectors or towards infrastructure development.

”At a population growth rate of three per cent, the question is what is the best – to invest in – infrastructure or consumption? There is a big debate that has to be made around this, and as stakeholders, we absolutely need to champion that debate with the Federal Government.

“The politicians want this to continue at all cost, but there is long-term damage we are doing to our country and industry. We need to ensure that this subsidy is altered and the downstream sector needs to be commercialised. The refineries need to function and pipelines need to function. There is no logic in is transporting our products by road which is extremely expensive.”

Tinubu said there was a need to discontinue the current consumption-based government spending.

He hailed the recent appointment of Mr Mele Kyari as the new Group Managing Director of the NNPC, describing him as an astute technocrat.