The payment of subsidy to oil marketers can longer be sustained by the Federal Government, Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke has said.
She, therefore, stressed the need for the total deregulation of the downstream oil sector to attract investors.
She made the observation at the ongoing Nigeria Oil and Gas Conference in Abuja.
According to Alison-Madueke, subsidy payable to marketers on imported refined petroleum products cannot be sustained.
She said, “Now that reforms in power sector are underway, the next focus should be reforms in the downstream sub-sector.
“The continued regulation of the downstream sector has its positive and negative impact on the economy, but the negative effect is more than the positive.
“The subsidy policy cannot be sustained any longer. This is because the subsidy payment did not benefit the poor it was targeting, but rather it is benefiting the rich.
“The industry needs to move to next level by increasing revenue and curb oil theft and pipeline vandalism”.
In considering the deregulation of the downstream sector, the minister argued that government must strike a balance in implementing some of its policies to meet the needs of Nigerians.
Alison-Madueke stressed that the country had been faced with fuel scarcity in the last two months and there seemed to be no end in sight in spite of assurances and intervention by the Nigerian National Petroleum Corporation, NNPC.
She again blamed the current fuel shortage in the country on sabotage, diversion, hoarding, panic buying and rumours of imminent pump price increase.
She also listed some of the challenges bedeviling the government to include incessant oil theft, pipeline vandalism and non-passage of the Petroleum Industry Bill.