The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has disclosed that the subsidy on Premium Motor Spirit (PMS), otherwise known as petrol, currently stands at N1.4 trillion annually.
The minister said this during a stakeholders’ workshop to review the challenges of the Nigeria’s Liquefied Petroleum Gas (LPG) sector.
He described the amount spent as “under-recovery”.
Kachikwu, who said the federal government is targeting ways to ease pressure on petrol, added that it would in the next couple of months unveil a roadmap that would address infrastructure deficits in the oil and gas sector.
According to him, it is time for Nigeria to harness alternative fuel sources like LPG as under-recovery from the importation and sale of petrol at the government-regulated price of N145 per litre has hit N1.4 trillion.
“It is a shame that at this stage in our national life, we are still talking about uses and challenges of the LPG. However, I think government is focused in all the areas.
“We are hoping to launch an infrastructure rebirth map for the oil sector over the next two months, and I hope his Excellency, the President will launch that.
“The effect is that it will be to open up tariff and create policy positions that will enable people to actually go in and invest in critical infrastructure that is needed.
“This is because anywhere you go, whether it is distribution of petroleum products massively through trucks, rather than through pipelines, whether its been able to take crude into refineries or distribute gas throughout the country, infrastructure is so key.
“There are lots of stranded gas and power everywhere. Distribution is key, infrastructure is key. “We need to find a way of finding enough incentives to enable the private sector go in very bullishly and put the money where it is supposed to be,’’ Kachikwu explained.
The minister said the issue of under-recovery was being addressed at a “very high level’’.
“Clean energy is very essential and we need to move away from complete utilisation in our transport sector of only petrol, which is creating a lot of under-recovery of N1.4 trillion per annum of exposure to the government.
“At the end of the day, we begin to go into other components of cleaner fuels and rely less on PMS that is gotten from out of the country,’’ he said.