Mele Kyari, the Group managing director of the Nigerian National Petroleum Corporation said the decision to end the fuel subsidy is in the interest of ordinary Nigerians.
He said this in an interview on Arise TV breakfast programme, The Morning Show.
Nigeria spends trillions of Naira on sustaining fuel subsidy.
According to him, ending the subsidy would free up funds for the various tiers of government to develop basic infrastructure in the education, health, transport, and other sectors.
“Subsidy is elitist because it is the elites that benefit from it. They are the ones that have SUVs, four, five cars in their garages.
“The masses should be the ones to benefit. There are many things wrong with the under-recovery because it makes us to supply more than is needed.
“This makes the under-recovery to be bloated because we unwittingly subsidize fuel for the whole of West Africa. That has to stop,” he said.
He explained that the removal of subsidy would automatically correct the distortions it created in the market such as products arbitrage and smuggling.
He said that it would also provide the needed impetus for the NNPC to establish retail outlets in neighbouring countries.
On the agitation in some quarters for a reduction in the price of kerosene, he said the corporation’s focus was rather on how to migrate all those who were still using kerosene for domestic cooking to the use of Liquefied Petroleum Gas (LPG) also known as cooking gas.
According to him, apart from LPG being a cheaper fuel than kerosene, it is also safer and more environment-friendly.
Crude oil prices
He said the Minister of State for Petroleum Resources, Chief Timipre Sylva, was championing policies to deepen the adoption of LPG for domestic consumption.
Kyari added that widespread adoption of LPG usage was the best solution to kerosene supply challenges in the long term.
On the situation with global crude oil price and supply, the GMD said things were shaping up.
“Crude oil price is improving by the day. Last week, it was $15 per barrel. Today, it is $32.79 per barrel.
“We believe the ongoing engagements between global oil producers will bring back demand and once that happens, the market will balance and fully recover by year-end,” he stated.