Nigeria’s Minister of Information and Communications, Labaran Maku (pictured), has endorsed the Government’s decision to deregulate the downstream petroleum industry, arguing that the move is essential to attracting investment that will develop the sector. The Federal Government, he added, is committed to ending subsidies on fuel because of their substantial cost, which diverts funds away from infrastructure investment.
Speaking on a visit to Champion Newspaper, Maku said that the money saved from removing fuel subsidies would be diverted into a new initiative, the Subsidy Reinvestment and Empowerment Programme (SURE). Maku explained that the programme would aim to mitigate the impact of discontinuing fuel subsidies, particularly on the poor and vulnerable sections of society. The programme will also accelerate investment in infrastructure programmes and help develop a national ‘safety net’ social programme.
“The total projected subsidy fund per annum is N1.134 trillion based on an average crude oil price of US$90 per barrel,” said Maku. “"Out of this, N478.49 billion accrues to Federal Government; N411.03 billion to state governments, N203.23 trillion to local governments, N9.86 billion to the federal capital territory (FCT) and N31.37 billion as transfers to derivation and ecology, development of natural resources and stabilisation funds".
State and local governments will be charged with designing their own programmes, he said, with oversight from a Federal Government board. "A robust programme structure has been developed to ensure adequate oversight, accountability and implementation of the various projects. The entire project will be overseen by a board to be constituted by President Goodluck Jonathan. Consulting firms with international reputation will be appointed to provide technical assistance to the board in financial and project management, among others,” said Maku.
"Subsidy has discouraged competition and stifled private investment in the downstream sector,” he added. "The deregulation of the downstream sector of the petroleum industry will lead to rapid sector investment in refineries and petrochemicals, which will generate millions of jobs and lead to increased prosperity for our people.”
PetrolWorld 22122011
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