Nigeria’s minister of state for petroleum, Ibe Kachikwu has revealed that the Nigerian government has spent over $65 billion on fuel subsidy in the last 5 years.
According to Dr Kachikwu, Nigeria incurred subsidies for petrol and kerosene estimated at $65bn between 2011 and 2015.
He made the revelation on Thursday during a presentation at a two-day African modular refinery forum at the forum; made up mostly of modular refinery manufacturers, partners, clients and contractors, organised by the Modular Refiners Association of Nigeria (MRAN), in partnership with the Department of Petroleum Resources (DPR).
Represented by the Deputy Director, Engineering and Standards of the DPR, Engr. Olumide Adeleke, Kachikwu said this amount excluded an estimated $6bn the country lost from the vandalism of oil and gas infrastructure.
The minister further said that had the subsidy bill been properly channelled, it could have financed the entire investment required to realise the Vision 20:2020 target of 50 percent national refining capacity of crude oil produced in Nigeria.
He complained that despite the country’s four refineries, Nigeria had been plagued with a continuous import cycle of 92 percent of its daily consumption.
“The foreign exchange requirement for importation of petroleum products is estimated at $28bn (N3.35tn) annually, with 40 percent of the total amount (N1.34tn) dedicated to financing the logistics of importation,” Kachikwu said.
Despite these challenges, the minister said that his objective remained to attain 50 per cent domestic refining capacity by the 4th quarter of 2018 and 100 percent domestic refining capacity by the 4th quarter of 2019.