Governors demand removal of fuel subsidy, say it’s not sustainable

Nigeria Governors Forum has demanded the removal of fuel subsidy as according to it, it is a drain on the nation’s resources and not sustainable.

Chairman of the forum and governor of Ekiti State, Kayode Fayemi, made the demand when he led a delegation to Mele Kyari, the new Group Managing Director of the Nigeria National Petroleum Corporation (NNPC).

He noted that subsidy remained a major source wastage on government revenues, maintaining that it has become necessary given the new reality of low oil revenues and rising government commitments.

“It is important to highlight that subsidy remains a major drawback on government revenues. We may need to consider a new deal on how governments will absorb the cost of subsidy,” he said.

“This has become necessary given the new reality of low oil revenues and rising government commitments. We believe that at the current course, subsidy costs will continue to offset any recovery in the oil market. The country recorded one of its lowest cost of subsidy in 2016 when oil traded at an average of US$48.11 pb. Total subsidy that year was around N28.6 billion; but the amount rose to N219 billion in 2017 and N345.5 billion by mid-2018, as the price of oil and domestic PMS consumption rebounded.These are important considerations for us, with direct implications on energy security and economic stability in the country.”

The governor said he had worked with the new NNPC GMD when he was minister of mines and steel and believes he has the capacity to deliver on the job.