The Nigerian National Petroleum Company Limited (NNPCL) on Thursday said Nigerians had missed enormous infrastructure development due to the protracted fuel subsidy regime in the country.
The NNPCL disclosed that the amount spent on fuel subsidy payments could provide 7,500km of a road network at N400 million per kilometre and 37 well-equipped 120-bed tertiary health centres at N32 billion per hospital annually.
Lawal Musa, NNPC’s senior business adviser to the GCEO, disclosed this in Abuja at a joint National Association of Nigerian Students (NANS)/Civil Society Organisations (CSOs) sensitisation workshop on the NNPCL Operations.
Mr Musa, in a presentation entitled ‘Petroleum Industry Act (PIA) and the Nigerian Economy’, said the federal government spent as much as N4.8 trillion annually on fuel subsidy at the expense of the well-being of Nigerians.
In an analysis of the opportunity cost of the subsidy spending, the NNPC official said deregulation could deliver 500,000 new houses and the education and upskilling of two million Nigerian students, among others.
Mr Musa explained that it could deliver N12 trillion in four years to Nigeria while annual petrol under-recovery would escalate to N3 trillion, stressing that the cost of fuel subsidy outweighed the direct benefits, particularly to the masses.
He maintained that deregulation could provide additional 27,000 megawatts of electricity to Nigerians and build and equip 2,400 hospitals in 774 LGAs.
“Nigeria is the largest producer of crude oil in Africa, possessing 28 per cent of Africa’s reserve, with petroleum contributing significantly to the country’s economy,” Mr Musa revealed. “The benefits derived have over the years been eroded due to the amount paid on subsidy, a regime has been fuelling the vicious circle of poverty in the country.”
The NNPC business adviser also explained that petrol was sold at the lowest price in Nigeria among most West African countries despite the average cost of $2.7 per litre globally, which amounted to N570 per litre.
He stated that verifiable petrol demand data is critical to National planning and energy security.
In an overview of the PIA and New NNPCL structure, Oritsemeyiwa Eyesan, NNPC’s chief strategy and sustainability officer, said the new entity was incorporated as a commercial company to be run like any other private company in the country, following the provision of the PIA 2021.
Ms Eyesan said NNPCL’s activities were guided by three core values: integrity, excellence and sustainability.
She explained that signing PIA into law overhauled the institutional, regulatory and fiscal framework for the Nigerian petroleum industry and provided a structured approach for managing host community development and investments.
Ms Eyesan said the PIA mandated the incorporation of NNPC and established NNPCL as a fully commercial entity.
“Under the Act, NNPCL is to conduct affairs without recourse to government fund. The new NNPCL is being owned by 200 million Nigerians with Ministries of Finance and Petroleum Resources as major shareholders,’’ she said.