The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr Emmanuel Kachikwu has said that subsidy cannot be sustained because it creates distortion in the economy.
Kachikwu said this while presenting a keynote address titled “Energy Crisis and Sustainable Development in Nigeria: The Way Forward”, at the National Association of Energy Correspondents (NAEC) Conference held at the Eko Hotel & Suites, Victoria Island, Lagos.
He was represented by Mrs Bolanle Ashafa, Acting Managing Director of Nigeria Engineering and Technical Company (NETCO).
He said “Subsidy creates distortion in government revenue distribution as a result of round-tripping and unnecessary carryover of expenditures every year in a way that is difficult for government to control or sustain.
He said “Subsidy creates distortion in government revenue distribution as a result of round-tripping and unnecessary carryover of expenditures every year in a way that is difficult for government to control or sustain.
“Subsidy accounted for 20 per cent of the federal government budget in 2013. Implementation of the policy will entrench efficiency in product usage, product availability and effective competition among investors, hence ending products shortage.
“However, critical enablers such as security of supply and distribution infrastructure must be assured to guarantee the availability of the petroleum products at affordable prices.
“Removal of price control mechanisms is deemed imperative to ensure full growth of the sub-sector, by allowing private stakeholders to complement the effort of government in developing the industry.
“We will focus on the need to address infrastructure constraints, to ensure sustainability of gas and petroleum products supply and distribution nationwide. We will be tackling infrastructure gaps and promoting inclusive growth, as well as capacity building.”
