The Minister of State, Petroleum Resources, Timipre Sylva on Thursday said the Federal Government will be saving over N1trillion annually, following the removal of subsidy of the Premium Motor Spirit, PMS, otherwise known as petrol.
Speaking with some political correspondents in Abuja, the minister said the decision to remove the subsidy is a policy direction that is good for the common Nigerians.
According to him, the deregulation of the oil and gas sector will free up a lot more money for the Federal Government to reinvest in infrastructure.
He said: “it is time for Nigerians to face reality and do the right thing. What is deregulation going to do? It is going to free up a lot more money.
“At least from the very beginning it will save us up to a trillion and more every year. Already, we have taken up the budgetary provision for subsidy which is about N500 billion in the budget.
“We have taken off the excess forex price that special rate that was given to NNPC which also came at a cost.
“So, all the money that we used to defend the Naira at that time to subsidise the Dollar will now be freed up for development.
“And, I believe that going forward; we will begin to see a lot more development, a lot more money available to the government that will be put into critical infrastructure instead of being burnt in our cars.”
The minister also attributed the ineffectiveness of the country’s refineries on subsidy, saying that subsidy has always scared investors away.
“No refinery can operate commercially in Nigeria with subsidy. If you have a refinery and you refine your product and you are expected to sell it at a subsidised rate, how is the refinery going to make profit and survive?
“So, nobody wanted to invest in refineries. And that is one of the reasons why our refineries became unsustainable as well because they were refining and selling at a loss.
“With deregulation, it means that refineries can operate commercially. And then you can see a lot more investment in that sector and it is going to create a lot of opportunities and jobs for our people.”