The oil and gas industry requires an annual investment of $20 billion yearly, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has said.
Mrs. Alison-Madueke, who was represented at the 8th Oil Trading Logistic Africa Downstream Expo, by the Deputy Director, Gas, Department of Petroleum Resources (DPR), Oliver Okparaojiako, said besides the required $20 billion annual investment to support the oil and gas sector’s activities, private sector participation is crucial in attracting additional funding at all levels.
She said the federal government is committed to institutionalising appropriate policy framework to foster investment and competition, stating that there is need to stop the fuel subsidy system.
She said fuel subsidy is unsustainable adding that the stunted growth of the downstream sector is attributable to the distortion introduced to the market as a direct result of the regulated regime.
There is need to eliminate this convoluted price subsidy and stimulate competition across the value chain, she said, insisting that the issue of subsidy removal cannot be over flogged.
According to the World Bank, subsidy on petroleum products in Nigeria and other oil-producing African countries would be unsustainable in the medium term.
“The truth is that heavy subsidy is an unsustainable expenditure even on the long term. It generally promotes energy inefficiency and imprudent consumption. Over the last 10 years Nigeria has taken important steps towards a more deregulated downstream. To provide a competitive market environment and sustain supply, the downstream should be fully deregulated. This is one of our proposals in the Petroleum Industry Bill awaiting passage by the National Assembly.”