Energy experts raise concern over Nigeria’s N1.4 trillion under-recovery
Energy experts yesterday in Abuja raised concern over Nigeria’s growing under-recovery or subsidy on Premium Motor Spirit (PMS), which currently stands at N1.4 trillion. The experts, including the President of Nigerian Association for Energy Economics (NAEE), Prof. Wumi Iledare and Professor of Energy Economics, Adeola Adenikinju said unless there was a total deregulation of the country’s downstream petroleum sector, addressing inherent challenges in the industry, particularly attracting investors would remain elusive.
Speaking at a press conference ahead of the 11th international conference of the association, which starts in Abuja tomorrow, Prof. Iledare said the rising under recovery was depriving Nigeria the gains of increasing oil price and create a glut in the nation’s economy on the long term.
Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had said that subsidy on petrol now stands at N1.4 trillion yearly.Iledare said creating a price cap for PMS remained one of the key mistakes of the current administration, adding that the President Muhammadu Buhari must speedily pass the Petroleum Industry Bill into law to address challenges in the sector.
Iledare, who noted that the passage of the Petroleum Industry Government Bill by the national assembly has removed the cloud that has affected the country for over the last 20 years, said he has not been in support of under recovery.He insisted that Nigeria also needs an advisory board that would advice the Federal Government on way out of growing energy concerns affecting the country.
He said the conference, which would focus on ‘New era in global energy landscape: Implications for an emerging economy’, would offer a platform for exchange of ideas among energy professionals in business, academia, government and other stakeholders, to address contemporary petroleum and energy policy issues.Also, Prof. Adenikinju expressed serious concern onthe growing profile of petrol subsidy in Nigeria.
“The issue of under recovery is something we need to address. I am worried. The price may not allow foreign investors to come into the sector. The price of oil is going on now but on the other hand we are paying more for the refined products. If you look at it very well, we are not taking advantage of the increase in price,” Adenikinju said.He added that there was need for policies that would address challenges militating against domestic use of natural gas in Nigeria.