The Federal Government spent over N1trillion on the payment of petroleum subsidy this year, the Minister of State for Petroleum Resources, Ibe Kachikwu has said.
Speaking when he appeared before the Senate/House of Representatives joint committees on the Medium Term Expenditure Framework (MTEF), he said subsidy expenditure was on the high side.
“The total subsidy figure for 2015 when taking along with the NNPC will be in excess of N1trillion. We can get this specifics but the point is largely that it does not involve NNPC because the agency takes its, off-cuff.
“We will work towards taking those figures off our budget in 2016. They are critical issues. The current pricing work we are doing had shown that there shouldn’t really be subsidy. The government doesn’t need to subsidy.
“There is energy around the removal of subsidy. Most Nigerians we talk to today, would say, that’s where to go. I have since left the dictionary of subsidy by going to price modulation which is a bit more technical. Price of refined products today is N87. It was N97 before it was removed and we really have to go back to that because we don’t really have the finance to remove it.
“There are lots of safety barometer between the N87 and N97per litre regime between which government does not have to fund subsidy. Yet the prices would be fairly close to what it used to be today. That is the first mechanism we are going to work,” he said.
On the daily oil production target, he said, “from August this year we have been exceeding two million daily productions through stringent monitoring of our production by getting quick fixes to instances of pipelines breaking. The internal projection for our system next year is in excess of 2.4m which is coming from enhanced and increased production from NPDC field.”