We are still very much committed to subsidy removal – Sylva

The Minister of State for Petroleum Resources, Timipre Sylva, has said the present administration would not meet up to complete the repairs of refineries

He stated this on Tuesday during his appearance on NTA’s Good Morning Nigeria program.

The minister, however, stressed that it is optimistic that the Buhari led administration will be able to complete 60 percent of the repair of the two Port Harcourt refineries before the end of its tenure.  Warri and Kaduna refineries said it would take much longer.

According to Sylva, “We agreed from the very beginning that the completion date would overflow into the next administration, but we agreed that there are milestones. We expect that by the end of this year, in Port Harcourt, we hope to achieve at least 60 percent of the capacity production from Port Harcourt.

“We are hoping that by the end of next year, the rehabilitation will have been completed. Of course, Warri and Kaduna started after Port Harcourt refineries, and of course, it will progress at a slower pace.

“But I believe that at the end of the year, all the refineries – Port Harcourt, Warri, and Kaduna – will be operating at a certain capacity. I cannot tell you what capacity it will be operating by the time we leave, but they will all be at least partially functional. We expect that since governance is a continuum, the next government will take up from wherever we stop and get it to the finishing line.”

Sylva asserted that the best way to attract investments into the oil sector and fight petrol theft was to remove subsidies for petroleum products. He, however,  said the president is protecting the interest of Nigerians who were already suffering.

“We are still very much committed to subsidy removal. It is just the timing that we are saying ok. Let us re-jig the timing. If it was six months, let us be given a longer time. Every other aspect of the Petroleum Industry Act is moving on.”

The minister also described the N3tn petrol subsidy budget for 2022 as unfortunate. He stressed that the money could have been used to achieve other essential things that would impact Nigerians. He added that Kuwait and Saudi Arabia had since scrapped their petrol subsidy.

“Look at it. N3tn is budgeted. You can imagine if this N3tn was budgeted for something else. Do you know what that means for the country? Who is going to benefit from this?” he asked.

Sylvia noted that when the refineries have been fixed and are working properly if subsidy payment and price regulation are not stopped, they will continue to operate at a loss, he said.

Speaking on Dangote’s refinery, the minister said when it finally commences, he, alongside the government-owned refineries, will produce about one million barrels of refined crude oil per day.

He added that the Dangote refinery would not crash the price of petrol significantly because it would be selling petrol at an international price.

“Dangote, yes, started his refinery under a subsidy regime. But if you notice, it was carefully planned as an export refinery, which is why it is in a free zone. It is by his port because he is not refining to sell at a loss as the other refineries were designed to do.

“He designed his to sell at a profit internationally mostly. If we buy from him, we will also buy at the international market (rate). The only saving that we will make is the cost of freight. So, that is Dangote’s model. It would not function under a subsidy regime. So, it is agreed that no refinery in the world can survive in a subsidy regime,” Sylva added.