Lai Mohammed, the Minister of Communication and Culture, on Tuesday, July 5, revealed the reason the Federal Government is unable to eliminate subsidies for Premium Motor Spirit (PMS), also known as petrol, at this time.
Lai said that many other countries were introducing measures to help their citizens cope with high oil energy prices, so Africa’s most populous country could not be an exception. He was speaking during an exclusive interview with Reuters in London.
Despite being the greatest oil exporter in Africa, Nigeria still needs to import almost all of its petroleum because it lacks the capacity to refine it.
The International Monetary Fund expressed alarm when the Federal Government postponed plans to end fuel subsidies earlier this year (IMF).
“When you consider the chaos, the social disharmony and … instability such an action (abolishing subsidies) would facilitate, is it worth it? I don’t think so,” the Minister said.
The Minister believes that a new industry law that allocates money to oil-producing communities would stop attacks and blamed the European Union’s climate change policies for stifling investment in the sector.
He added, “We believe that climate change is real and important for emission control, but there is a bit of double standard in the EU policy regarding climate change.”
In addition to attacks on oil infrastructure, several parts of the north are plagued by violence orchestrated by bandits while dozens were killed in church attacks in Kaduna and Ondo States last month.
Lai also pointed out that since 2015, the administration of President Muhammadu Buhari has made strides against Boko Haram.
Nigeria experiences sporadic fuel shortages, and to pay for the subsidy, it has increased borrowing and twice this year’s deficit forecast.
With $1 billion in income lost to crude oil theft in the first quarter of this year, the nation’s petroleum production has also fallen short of government goals.
The important pipeline carrying refined petroleum products to Mosimi, Ibadan, Ore, and Ilorin fuel depots has seen an increase in theft and vandalism occurrences, which has alarmed the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).