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HomeNewsEconomyOver $1bn spent on kerosene subsidy in 2015 – Osinbajo

Over $1bn spent on kerosene subsidy in 2015 – Osinbajo

Vice President Yemi Osinbajo yesterday said the Federal Government spent more than $1 billion in 2015 to subsidise kerosene consumption in Nigeria.

Though the government had in May 2016 stopped paying subsidy on kerosene, Osinbajo however, said that the practice was a huge drain on the country’s foreign exchange.

The vice president said this at a stakeholders’ forum on strategies for the implementation of the government’s plan to increase the use of Liquefied Petroleum Gas (LPG) or cooking gas in Nigeria.

“About 40 per cent of our domestic LPG consumption in 2015 was imported, this impacts on our foreign exchange,” he said, adding that steps were being taken by the government to make LPG the most preferred domestic fuel in Nigeria as an inter-ministerial committee headed by him had been set up by the government to drive the process.

He said that within the next 15 years, the government plans to get 21 million new homes to convert to LPG as their domestic fuel.

Prof Osinbajo explained that Nigeria’s low LPG consumption ratio had led to kerosene and firewood becoming the primary cooking fuels in many homes.

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He also noted that these fuel sources have been confirmed to be unhealthy and costly.

“The low LPG consumption in Nigeria has resulted in heavy dependence on kerosene and firewood as primary domestic cooking fuel. The government has undertaken huge subsidy of over $1 billion spent in 2015 on kerosene subsidy.”

Managing Director of the Nigeria Liquefied Natural Gas (NLNG) Limited, Mr. Tony Attah in his remark said that a recent study conducted by the NLNG showed that if the country adopts a well-coordinated LPG market expansion strategy, it would have an annual growth rate of 32 per cent from the current 400,000MTPA to over 3MMTPA in five years.

He also stated that such growth would lead to about 12 kilogram increase in the country’s LPG per capita consumption rate.

 

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