The 36 state governors on Wednesday called for the removal of the fuel subsidy regime, describing the scheme as unsustainable and a drain on the nation’s resources.
The governors, who spoke through Kayode Fayemi, the Ekiti State governor and chairman of the governor’s forum made the call when he led his colleagues on a visit to Mele Kyari, the new group managing director of Nigeria National Petroleum Corporation (NNPC).
Fayemi said, “It is important to highlight that subsidy remains a major drawback on government revenues. We may need to consider a new deal on how governments will absorb the cost of subsidy.”
“This has become necessary given the new reality of low oil revenues and rising government commitments. We believe that at the current course, subsidy costs will continue to offset any recovery in the oil market. The country recorded one of its lowest cost of subsidy in 2016 when oil traded at an average of US$48.11 pb. Total subsidy that year was around N28.6 billion; but the amount rose to N219 billion in 2017 and N345.5 billion by mid-2018, as the price of oil and domestic PMS consumption rebounded. These are important considerations for us, with direct implications on energy security and economic stability in the country.”
Fayemi who describe, Kyari the new NNPC boss as a man of intergrity, assured that he would deliver on his promises to the nation.
With Wednesday’s call, the governors has joined the growing list of voices calling for the removal of the fuel subsidy regime.