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Petrol subsidy removal for lasting energy security, Nigeria’s economic prosperity — Tinubu

Alhaji Mohammed Idris, Honourable Minister for Information and National Orientation

*President Bola Ahmed Tinubu, at an international energy summit in Abuja, restated his administration’s decision to end the hitherto controversial subsidy regime was ‘to ensure long-term energy security and economic prosperity of Nigeria’

Isola Moses | ConsumerConnect

Several months after making the policy statement during his inaugural address May 29, 2023, President Bola Ahmed Tinubu, GCFR, has affirmed that his administration’s decision to remove the hitherto controversial subsidy on Premium Motor Spirit (PMS), otherwise called petrol was premised on the need to “ensure long-term energy security and economic prosperity of Nigeria.”

President Tinubu stated this in his keynote address Tuesday, February 27, 2024, at the opening ceremony of the 7th Nigerian International Energy Summit (NIES), held in the Presidential Villa, Abuja, FCT.

The Nigerian leader, represented on the occasion by Alhaji Mohammed Idris, Honourable Minister for Information and National Orientation, explained the petroleum subsidy had, over the years, strained the country’s economic resources, leading to inefficiencies and, most importantly, hindering ability to invest in critical areas of energy security.

Mrs. Oluwakemi Ogunmakinwa, Deputy Director of Press and Public Relations, in the Ministry of Petroleum Resources, in a statement Tuesday, quoted Tinubu to have admitted that the decision to remove the petroleum subsidy was a challenging one at the time, he stressed that it was a step that must be taken to secure Nigeria’s energy future and foster economic growth.

By removing the subsidy, the President said: “We are creating a more transparent and accountable energy sector.

“The funds that were previously allocated to subsidising petroleum products are now redirected towards developing and upgrading our energy and other social infrastructure.”

He also noted: “While we are immersed in energy security, let us not forget that Energy Transition is another key aspect of our discussions.

“We stand on the brink of a new era, where traditional energy sources are being complemented and, in some cases, replaced by cleaner and more sustainable alternatives.

“This transition is not only an environmental necessity but also an economic opportunity.

“We must leverage innovation and collaboration to ensure a smooth and just transition that will leave no one behind.”

Major gains of fuel subsidy removal, by President

Highlighting some of the gains of the removal of the subsidy, President Tinubu said the private sector had been encouraged to participate in the energy industry with potential of attracting more local and international investors while fostering innovation and competition that will drive down costs and improve the overall efficiency of our energy sector.

Earlier in his address at the opening ceremony, Rt. Hon, Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), advocated a shift towards the vast potential that lies in Nigeria’s gas sector.

Ekpo also emphasised that the shift towards gas was not merely an option but a necessity for the country’s economic resilience.

The Minister stated that the gas industry presents a unique opportunity to diversify revenue streams, reduce dependence on oil, and create a more robust and sustainable economic foundation.

Ekpo equally noted that the theme of NIES 2024, “Navigating the new energy world order: Security, Transition, and Finance”, underscored the challenges and opportunities that define our times.

He stated: “The theme resonates deeply with the path that the gas industry must tread to ensure Nigeria’s economic transformation.”

The Minister posited that the theme of the summit synergised with Nigeria’s gas industry’s transformative potential.

Ekpo disclosed that energy security extends beyond geopolitical stability to include energy infrastructure’s resilience, diversity, and reliability.

“The gas industry, with abundant proven gas reserves of more than 208 trillion cubic feet (TCF) and further exploration potential, is crucial for enhancing energy security. In the light of the above, Nigeria has no business with energy poverty,” said he.

On the energy transition side, the Minister reiterated: “Nigeria has chosen gas as our transition fuel, facilitating the shift from more conventional to new and renewable energy sources.

“With its lower carbon footprint and versatility, natural gas aligns with global climate objectives while providing a reliable solution for our energy needs.

“Nigeria, with significant gas reserves, should leverage this advantage to become a key player in the global energy transition and a regional powerhouse for gas processing and industrialisation.”

As regards finance, the Minister noted that Gas was attracting domestic and foreign investments that are crucial to unlocking the full potential of our gas resources.

He announced that significant progress has been made in the realisation of the ‘Decade of Gas’ vision.

“The official secretariat is now operational and fully functional,” he stated.

Also in his presentation at the ceremony, Sen. Heineken Lokpobiri, Minister of State Petroleum Resources (Oil),

said in spite of the abundant oil and gas reserves in the country, Nigeria suffers from energy poverty as the reserves have not translated into economic prosperity contrary to what obtained in the Middle East.

The Minister, therefore, implored the participants in the summit to unravel what other oil-producing countries are doing to bring economic prosperity to their countries that Nigeria hasn’t done.

He noted that the task of exploring oil reserves should be given to those who have proven capacity, both financially and technically to be able to explore  oil and gas reserves for the benefit of Nigerians and the global energy landscape, adding that, the easiest way to guarantee energy security in Nigeria was to get the right investment.

According to Lokpobiri, in exploration, the target should be to explore these resources in a more environmentally friendly and sustainable ways.

The Minister urged the delegates at the summit to come up with brilliant ideas in ensuring that we have energy security in Nigeria and ramp up production.

He stated: “The only way we can guarantee energy security is to increase production in the upstream so that we will be able to provide the right quantity to service our obligations, both locally and internationally.”

Likewise, in his opening remarks, the Permanent Secretary, Ministry of Petroleum Resources, Amb. Nicholas Agbo Ella, said, “The global energy landscape is undergoing a transformative shift, and it is imperative that we collectively address the challenges and opportunities that come with this new order.

“Through thoughtful discussions, insightful panels, and robust deliberations, we aim to chart a course that ensures the security of our energy resources, facilitates a smooth transition towards sustainable practices, and addresses the financial dynamics of the sector.”

In his goodwill message to the summit in Abuja, the Secretary-General, Organisation of Petroleum Exporting Countries (OPEC), H.E. Haitham Al Ghais, said, Nigeria’s role in OPEC’s past and present was a tremendous source of pride.

Al Ghais stated that OPEC was also acutely conscious of Nigeria and Africa’s critical role in the future of our organisation and the energy industry more broadly.

He acknowledged the contributions of successive generations of Nigerian public servants and captains of industry in making the OPEC-Nigerian relationship a success.

The Secretary-General of African Petroleum Producers Organisation (APPO), Dr. Omar Farouk Ibrahim, in his message said, the decision on which country, the proposed African Energy Bank would be sited is to be taken by the end of the first quarter of 2024, adding that seven countries including Nigeria are jostling for it.

Ibrahim said the bank is expected to take off not later than the end of the first half of 2024.

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