The federal government’s decision to raise the price of NNPC PMS petrol from N86.50 to N145 has sparked a political wildfire, with many Nigerians reacting furiously to the change.
Kachikwu himself was hauled before the House of Representatives today to defend his government’s decision in front of hostile lawmakers.
The minister insisted before the representatives that the government had no choice but to remove the subsidy, and after the meeting took place released a video on Facebook outlining the reasons behind his decision.
The minister insisted before the representatives that the government had no choice but to remove the subsidy, and after the meeting took place released a video on Facebook outlining the reasons behind his decision, listing five key points.
Nigeria faces a major forex shortage
Kachikwu said that when the APC government was elected last year it was confronted by a major forex shortage, currency badly needed to buy PMS fuel.
He said this forced the NNPC to ends its normal practice of providing 55% of petrol for consumption to providing only around 10%.
He went on to blame the forex shortage for the long ques Nigerians have seen at the petrol pumps for months.
Nearly 55% of oil barrels are sold abroad
The minister said that more than half of the oil Nigeria produces as a nation ends up being sold abroad.
Kachikwu said that the rest needs to go to refineries, which were not working when his government came to power thanks to the previous administration not living up to its agreements, thus causing a shortage.
Nigeria faces attacks by Niger Delta militants
Kachikwu said oil production has been slashed from 2.2 million barrels to 1.4 million barrels a day due to militants attacking oil installations in the oil rich Niger Delta region.
Blaming the militants directly, he said the government was hesitating on the decision to remove the subsidy when attacks cur production down to 1.8 million barrels, but when production fell further it decided it had to act.
President Buhari remains opposed to privatization
Re-emphasizing President Muhammadu Buhari’s opposition to liberal or privatization policies, Kachikwu said the government had to remove the fuel subsidy to prevent de-nationalization.
He said the reality was there was no option, remove the subsidy or privatize the NNPC.
100,000 jobs will be created
The petroleum minister said that thanks to the liberalization aspect of the fuel subsidy removal, up to 100,000 jobs would be created in the oil and petroleum industry.
Kachikwu said these jobs would be created thanks to increased investment in infrastructure in the sector, along with an increased role of smaller, private companies.
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