FG will not spend on fuel subsidy in 2016 – Kachikwu

Emmanuel Ibe Kachikwu, minister of state for petroleum resources and group managing director of NNPC, on Thursday said that the novel price modulation mechanism currently in place will ensure that the Federal government records zero expanses on fuel subsidies in 2016.

Kachikwu made this declaration while delivering the 45th convocation lecture of the University of Nigeria, Nsukka (UNN), under the theme, “The Petroleum industry and the future of the Nigerian National Oil Resource Management and the Implication for National Security and Economic Survival,” to an audience of grandaunts, management of the school and invited guests.

This was contained in a release by Ohi Alegbe, NNPC’s group general manager, group public affairs division. The NNPC’s spokesman quoting Kachikwu, stated that the zero fuel subsidy regime is already in place and would be sustained based on the prevailing modified pricing template for petroleum products which has eliminated extraneous cost elements.

“Without necessarily removing subsidy, the government will spend zero amounts in subsidy in 2016. This may sound unbelievable to some people but that is part of the change agenda of the present administration of President Mohammadu Buhari.”

Kachikwu said that despite the difficulties of yester-years, the oil and gas industry in Nigeria is primed for greater achievements in the months and years ahead as recent landmark reforms being engendered and activated by the administration.

According to Kachikwu, the central objective of the on-going oil and gas reform agenda includes; increasing revenue for the country through sales of petroleum and petroleum products and taxes on profitable enterprises, maximising value added on the crude oil and gas to establish linkages with other sectors through local processing and establishment of gas based industries thereby stimulating economic growth and development as well as providing employment opportunities for Nigerians.

“Significant improvement in governance macroeconomic and fiscal policies are key to harnessing oil and gas resources for the sustainable development of Nigeria through enshrining transparency and accountability, empowering good governance and transparency in expenditure and revenue management.”

The NNPC boss also noted that the on-going reform is designed to create competitive framework for public private partnerships anchored on durable financial investments.