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N300 billion for fuel subsidy as Warri refinery resumes operation
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The Federal Government is to spend N300-billion this fiscal year as subsidy to sustain the N70 per litre of petrol.
The 2008 subsidy is N39 billion more than the N251 billion subsidy for last year.
Deputy chairman, House committee on petroleum resources, (Down Stream), Samuel Aro who disclosed this to BusinessDay in Abuja said at present without subsidy, the pump price of PMS should have been N92 per litre, but government is subsidizing the N22 on top of every litre.
Aro however said the good news from the petroleum sector is that the Warri refinery commenced operation last Tuesday and is expected to supply crude oil to Kaduna refinery which will commence operation in the next few weeks.
He said the commencement of operation by the nation’s three refineries will only reduce importation of petroleum products but will not eliminate it.
“At the moment, the daily local consumption is put at 25 million litres per day and all our refineries even at full capacity operation can only produce 18 million litres so we still have to import seven million litres daily to support local consumption,” he said.
The lawmaker was of the opinion that government cannot continue to subsidise petroleum products supply at the expense of so many other social responsibilities.
He however allayed fear that government may increase the pump price of petrol now saying President Yar’Adua will live up to his promise to stabilise the price till June this year.
Aro recipe for reducing the pump price of petroleum products is to encourage private investors’ investment in refineries.
He wondered why the private operators licensed by Department of Petroleum Resources DPR have not commenced operation in the country.
According to him, because of the pressing needs to alleviate the suffering of the people and stabilise the pump price of petroleum products, his committee will next week commence on- the- spot assessment of the down stream sector.
“These are the questions we are going to ask the DPR, why those refineries licensed are not working, what is happening to them and what stage are they now. We want to know all these” he said.
He said the House is also planning a legislation to protect pipelines in the country and curb incessant vandalism of the pipelines.
He also noted that the pipelines in place now have to be upgraded because most of them are more than 30 years old.
“Besides, all these pipelines do not have the modern devices to monitor them and you will agree with me that government needs to properly monitor these pipelines in view of the cases of pipelines explosions caused by vandalism” he said.
On the use of dollar for foreign reserve, Aro said the president has already set up a presidential economic Committee to look into all that and Nigerians should allow them evolve plans on economic matters.
Deputy chairman, House committee on petroleum resources, (Down Stream), Samuel Aro who disclosed this to BusinessDay in Abuja said at present without subsidy, the pump price of PMS should have been N92 per litre, but government is subsidizing the N22 on top of every litre.
Aro however said the good news from the petroleum sector is that the Warri refinery commenced operation last Tuesday and is expected to supply crude oil to Kaduna refinery which will commence operation in the next few weeks.
He said the commencement of operation by the nation’s three refineries will only reduce importation of petroleum products but will not eliminate it.
“At the moment, the daily local consumption is put at 25 million litres per day and all our refineries even at full capacity operation can only produce 18 million litres so we still have to import seven million litres daily to support local consumption,” he said.
The lawmaker was of the opinion that government cannot continue to subsidise petroleum products supply at the expense of so many other social responsibilities.
He however allayed fear that government may increase the pump price of petrol now saying President Yar’Adua will live up to his promise to stabilise the price till June this year.
Aro recipe for reducing the pump price of petroleum products is to encourage private investors’ investment in refineries.
He wondered why the private operators licensed by Department of Petroleum Resources DPR have not commenced operation in the country.
According to him, because of the pressing needs to alleviate the suffering of the people and stabilise the pump price of petroleum products, his committee will next week commence on- the- spot assessment of the down stream sector.
“These are the questions we are going to ask the DPR, why those refineries licensed are not working, what is happening to them and what stage are they now. We want to know all these” he said.
He said the House is also planning a legislation to protect pipelines in the country and curb incessant vandalism of the pipelines.
He also noted that the pipelines in place now have to be upgraded because most of them are more than 30 years old.
“Besides, all these pipelines do not have the modern devices to monitor them and you will agree with me that government needs to properly monitor these pipelines in view of the cases of pipelines explosions caused by vandalism” he said.
On the use of dollar for foreign reserve, Aro said the president has already set up a presidential economic Committee to look into all that and Nigerians should allow them evolve plans on economic matters.
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