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FG saves N15.4bn monthly from deregulation of downstream petroleum sector—VP

Vice President Yemi Osinbajo has revealed that the deregulation of the downstream sector, which led to the elimination of petroleum subsidy has saved the government a burden of N15.4 billion monthly.

The vice president, who was represented by the attorney-general and minister of justice, Alhaji Abubakar Malami at the presentation of the 2016 petroleum sector scorecard held at the auditorium of the Petroleum Technology Development Fund (PDF) in Abuja, said the oil and gas sector remain very critical to the stability and growth of the nation’s economy as it accounts for about 90 per cent of the country’s earnings, in addition to contributing substantially to the inflow of foreign exchange and growth of foreign reserves.

Prof. Osinbajo further disclosed that the Federal Executive Council (FEC) had recently approved new measures and strategies aimed at eliminating the burden of Joint Venture Cash Call arrears and easing future payments in the up-stream sector, stressing that the strategies are fully supported by the National Economic Council (NEC).

He noted that the measures will boost additional investments and raise daily production levels to about 2.8 million barrels per day (mbpd) in the long-run.

He said “Today, as a team, we have recorded commendable achievements in our sector:  the introduction of the PMS Price Modulation Matrix; the availability of PMS in all outlets; eradication of payment on fuel subsidies; located foreign direct investment to finance midstream oil and gas infrastructure; adopted exit strategies on Joint Venture Cash Call; robust engagement of host communities to reduce agitations; creation of more stable industrial relations”.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, revealed that one of the fallouts of the removal of petroleum subsidy was the decline of the nation’s daily consumption of the premium motor spirit (PMS), from the 50 million litre per day (mlpd) previously to the current figure 28mlpd.

On the issue of militancy in the Niger Delta, the minister said negotiations are at top gear, adding that the government targeted to achieve zero militancy for the industry in 2017.

The chairman, Senate Committee on Upstream Petroleum, Senator Omotayo Donald, in his speech, commended the petroleum resources ministry for embarking on the reforms, and pledged that the National Assembly will support the efforts with all the legal backing required to achieve the transformation of the sector.

He assured Nigerians that the first part of the Petroleum Industry Bill (PIB) will be passed by the National Assembly by the first quarter of 2017.