Tinubu Gives Reasons Why Petrol Subsidy Removal Is Challenging But Necessary

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The Nigerian government said Tuesday the decision to remove petroleum subsidy is a challenging one but necessary move needed to promote long-term energy security and economic prosperity in the country.

President Bola Tinubu disclosed this at the opening ceremony of the ongoing 7th edition of the Nigeria International Energy Summit (NIES 2024) held at the presidential banquet hall in Abuja on Tuesday.

“Our great nation has long been dependent on the revenue generated from oil exports, and as we stand at the crossroads of the 21st century, it is imperative that we re-evaluate our energy policies to ensure a sustainable and secure future. The decision to remove the petroleum subsidy is a challenging one, but it is a step we must take to secure our energy future and foster economic growth”

Tinubu, represented by Mohammed Idris, the Minister of Information and National Orientation, said energy security is an important concern for any nation striving for economic stability and development.

“It encompasses not only the availability and accessibility of energy resources but also the resilience of our energy infrastructure,” he said.

He added that the petroleum subsidy has, over the years, strained the country’s economic resources, leading to inefficiencies and, most importantly, hindering the ability to invest in critical areas of energy security.

“By removing the subsidy, we are creating a more transparent and accountable energy sector. The funds that were previously allocated to subsidising petroleum products are now redirected towards developing and upgrading our energy and other social infrastructure,” he said.

Furthermore, Mr Tinubu said the removal of the subsidy has encouraged private sector participation in the energy industry with the potential of attracting more local and international investors, fostering innovation and competition that will drive down costs and improve the overall efficiency of the country’s energy sector.

“I am acutely aware of the immediate impact this decision may have had on our citizens, especially those with lower incomes. Therefore, in parallel with the subsidy removal, my administration is committed to implementing social intervention programmes to mitigate the short-term effects on vulnerable populations.

“These programmes will ensure that the burden of the subsidy removal is shared equitably and that the most vulnerable among us are protected. The decision to remove the petroleum subsidy is not an easy one, but it is a necessary one for the long-term energy security and economic prosperity of our beloved nation,” he said.

Energy security
On energy security, he emphasised leveraging innovation and collaboration to ensure a smooth transition that will leave no one behind.

“Energy transition is another key aspect of our discussions. We stand on the brink of a new era, where traditional energy sources are being complemented and, in some cases, replaced by cleaner and more sustainable alternatives,” he said.

“We must leverage innovation and collaboration to ensure a smooth and just transition that will leave no one behind. Finance, as always, plays a pivotal role in driving the energy agenda.

“Adequate funding is crucial to support the development and deployment of cutting-edge technologies, infrastructure, and projects that will shape our energy future. As a nation, we must explore innovative financing models, engage with the private sector, and attract investments that will propel us towards a more resilient and diversified energy sector. Together, we can navigate the new energy world order with resilience, innovation, and a shared commitment to a sustainable and secure energy future for Nigeria,” he added.

Also speaking, the Permanent Secretary, Ministry Petroleum Resources, Nicholas Ella, said “The global energy landscape is undergoing a transformative shift. It is imperative that we collectively address the challenges and opportunities that come with this new order.”

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