The Minister of State for Petroleum Resources, Chief Timipre Sylva, on Tuesday, May 18, disclosed that the subsidy on Premium Motor Spirit, popularly known as petrol, would soon be withdrawn because the federal government can no longer continue to shoulder the burden.
According to the Minister, if it was not for the provision of cash from signature businesses from Marginal Oil Fields by the Department of Petroleum Resources (DPR), the shortfall in remittance into the Federal Account last month would have been unbearable for the Federation Account Allocation Committee (FAAC).
“NNPC announced that they could not make remittance to FAAC and the DPR came to the rescue. Luckily the DPR was in the position to step in and the marginal field revenues were used to fill the gap”, he said.
He maintained that there is no going back on the decision, though the withdrawal of the subsidy will be painful initially, but it will pay off for the poor in the long run.
He further explained that the petrol subsidy favours a few rich individuals and firms.
“Labour and the Federal Government are not on different pages. Even Labour understands but what we have agreed is that we need to have an alternative and the process of putting it in place is what is on-going”, Sylva said.
He said the Federal Government will soon disengage from managing refineries and they will be handed over to Operation and Management Contractors or allow Nigerians to decide if the government should sell them or go public at the stock exchange.
He further remarked that the refineries in Nigeria have been the weeping babies of the industry, but it is important that they are made functional before people can say the direction to take.