The Federal Government on Friday said stand on Subsidy has not change.
It said, however it is determined to ensure price stability so as to avoid any unrest.
The International Monetary Fund had alleged that the government still maintains subsidies on fuel pump price and electricity tariff despite President Bola Tinubu announcing removal of subsidy.
The Special Adviser to the President on Energy, Mrs. Olu Verheijen who spoke at the Ministerial press briefing in Abuja, said it is the prerogative of the government to maintain price stability.
She argued that the developed countries including the United States do the same so as to prevent volatility in the economy.
She therefore said government intervention to stabilise price does not remove the fact that subsidy has been removed.
She said, “The question of subsidy, the subsidy was removed on May 29, 2023. However, the government has the prerogative whether the US, in the West and other Eastern countries, all governments have the prerogative to maintain price stability and prevent social unrest.
“ So if prices are moving, they reserve the right to intervene. It started in the US during COVID. There was a lot of expansionist moves but also subsidies.
“All governments deserve that right. And so if for whatever reason the administration has reviewed that it is not the right time to have prices continue to fluctuate given the level of hardship in the country, given inflation, the government has the right to intervene intermittently.
“All governments do so but it does not take away the fact that the subsidy was removed.”
On tapping the country’s gas potential, Verheijen pointed out that part of the objective of the fiscal incentives that the President recently signed is to reverse the over 70% undeveloped gas reserves.
To do this, she said “We need to address the fundamental issues in sectors so that we can attract capital to the infrastructure and there is no one who’s going to invest in Infrastructure if they don’t have assurance, the line of sight to the attractiveness of gas supply.
“So, if gas suppliers are not making any investment because the fiscal terms of the business environment is a very difficult one in which to invest in, then it will be difficult to continue to mature mainstream projects and downstream projects because you have to deal with the ab initio problem which is gas supply.
“And that is exactly what President Bola Ahmed Tinubu has done by fast tracking this policy directives to ensure that we have sufficient gas supply whether we’re trying to export, whether we’re trying to compress natural gas or liquefied for domestic use, whether we’re trying to have floating energy as an alternative ways of getting gas into the market, all of those things are enabled by these policies.”
She also revealed that “There is fund that exists and is ready to make investments in infrastructure.
“There are lots of investors who are very interested in making investments in infrastructure, but it’s like building a road without having a car to drive with it. You cannot invest in infrastructure to compress gas if there is no gas. “
She stressed that the needed investment to be done in a short while, saying, “because we are trying to signal to investors to make these investments as quickly as possible. But each directive has its timeline.”
She however explained that the president’s directive “is a signal to all the participants and stakeholders to move as quickly as he has.
“ These incentives that we just passed will also allow us to ensure that they’re still alive on train seven which is almost far from its construction.
“ From those investors’ perspectives until those fundamental investment decisions that they have taking assured supply by some of the actions we’ve taken this week.”
“It is the government’s role to set strategic objectives around where it’s trying to go. As a country. We’ve outlined our strategic objective, which is to grow production so that we can grow revenue and use that revenue to enable economic opportunities for more and more Nigerians.
“So the divestments have to be two parties who have the technical and financial capacity to deliver on all those objectives.
“So they will have the need to have the technical and financial capacity not only to send demand, but also to grow production so that we can have more revenue and more opportunities for Nigerians.”
On pricing of cooking gas, she explained that a significant portion of our gas is being imported, “So we are price takers, not price setters.”
She however said “ because the President was very concerned about the cost of living, he approved the fast tracking of fiscal incentives to enable more investments into the LPG space with the hope that if we achieve scale, we can bring down costs. And we can also incentivize the domestication of some of our LNG production.
“We started it, but unfortunately foreign exchange and the market prices began to increase.
We’re going to continue to work and look at more opportunities to improve supply and scale up and enable all LPG into the market at affordable prices. It’s a priority of this administration.
