Yemisi Izuora/Ijeoma Agudosi
Ibe Kachikwu, the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) has given the indication that government will soon throw overboard the notorious fuel subsidy initiative saying the policy is undermining government treasury.
Kachikwu who spoke today at the conference organised by the National Association of Energy Correspondents (NAEC) in Lagos said,”Subsidy creates distortions in government revenue distribution,”.
According to him, Nigeria produces some two million barrels of crude a day but despite its huge reserves, the country imports much of its fuel due to a lack of refining capability a situation blamed on corruption and mismanagement.
He informed that subsidy accounted for 20 percent of the federal government budget in 2013,” adding that the country spent more than five trillion naira ($25 billion/22.5 billion euros) on fuel subsidies between 2006 and 2012.
Nigeria is Africa’s largest oil producer, with 37.4 billion barrels of crude in its reserves and crude accounts for more than 90 percent of Nigeria’s export earnings and about 80 percent of federal government revenue, Kachikwu said.