The Federal Government on Tuesday admonished Nigerians to brace up for an increase in petrol pump price.
The Minister of State, Petroleum Resources, Chief Timipre Sylva who gave this charge during the official launch of the Nigerian Upstream Cost Optimisation Program in Abuja noted that the provision of subsidy was not made in the 2021 budget.
This is coming just as the international price for petroleum climbs above the $60 per barrel.
Sylva who disclosed that the Nigerian National Petroleum Corporation (NNPC), cannot continue to bear the cost of underrecovery said that as it stand today, the pump price of petrol ranges from N160 –N165, the price set when crude traded just above $43 per barrel, four months ago.
He disclosed that while government revenue has improved by the rise in crude oil price, it cannot be fretted away in subsidy payment.
“Since we are optimising everything, NNPC needs to also think about the optimisation of product cost because as we all know oil prices are where they are today, $60.
“As desirable as this is, this has serious consequences as well on product prices. So we want to take the pleasure and we should as a country be ready to take the pain.
“Today the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy.
“So, somewhere down the line, I believe that the NNPC cannot continue to take this blow. There is no way because there is no provision for it,” Sylva said.
He further revealed that the Federal Government will soon begin oil production in the Northeastern part of the country.
Sylva who disclosed that drilling activities in the Lake Chad Basin are already ongoing said, the government will not relent in its effort to ensure successful utilisation of the oil found in the area.
“I have said it a few times that we have found oil in the Northeast and we have started drilling activities in the Lake Chad Basin.
“I don’t know how the discovery of oil in the area will impact all the issues there, but on our side, we believe that in a very short time, we will start production.
“On our part, we will not relent until successful utilisation of the products is achieved,” he said.
The Minister who lamented that the COVID-19 pandemic has changed the world’s narrative including the oil and gas industry, stressed the need to use the opportunity to do things right.
He recalled that the recent meeting held by the Organisation of Petroleum Exporting Countries (OPEC) in which Nigeria is a member was held virtually, noting that such meetings were not envisaged before the COVID-19 era.
On the oil bunkering and illegal refining in the oil-producing region, Sylva said that such activities had reduced when compared to what was obtained in the past.
“Pipeline vandalisation is less than it used to be. Before now, we had less than 50 per cent production, I can assure you that pipeline vandalisation is less than it used to be. If you compare what happens now with what obtains in the past, I think it is less now.
“There is still a lot of piracy I understand, but the law enforcement agencies are dealing with it. We are looking at other ways of dealing with it and believe that in a very short time, we will be able to get the full handle on it,” he added.
Speaking on the gas conversion, the Minister explained that the policy was necessitated by the Federal Government issuing an alternative to Nigeria following the deregulation of oil that will lead to the rise in oil prices.
(The Daily Times)