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FG to spend N600bn on oil subsidy

By Omoh Gabriel, Business Editor

LAGOS—THE Federal Government has estimated that it will spend N600 billion on petroleum subsidy this year alone, stating that the money will come from excess crude account savings.

This was disclosed by the Minister of Finance, Dr. Mansur Murthar, to participants at the consultation between the government and stakeholders in oil and gas reform.

The minister, it was learnt, said government see “subsidies as a major challenge in the downstream petroleum sector which needs to be addressed.

He stressed the need for all stakeholders to collaborate with government in the implementation of the envisaged reforms.

He added that about 29 per cent of the foreign exchange sales were used to finance the importation of refined petroleum products in January, and subsidy payment for 2009 is estimated at about N600b.

According to a dependable source at the stakeholders forum, the minister said that subsidy payments are being  financed from the excess crude account which further makes it unsustainable in the medium to long-term.

The minister, the source said, further disclosed measures to improve infrastructures already endorsed by Mr. President and being implemented by the Federal Ministry of Transport and the Nigerian Ports Authority.

These measures include: Reducing Nigerian Ports Authourity, NPA,  jetty charges by 50%; Resuming routine maintenance of jetties, for example, sweeping of Apapa jetty; Commencing the dredging of Apapa jetty, including exploring the scope for private involvement and seeking the cooperation of all Nigerians in the implementation of the oil sector reforms being embarked upon by the government.

Also, the government is meeting with relevant stakeholders in attempt to carry all Nigerians along in the reform process. The minister of Finance Dr. Murthar Mansur who is the chairman of the reform implementation committee and the Chief Economic adviser to the President have already met with Labour, Independent and Major oil marketers, Pengassan, Nupeng.


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