For Nigeria to eliminate fuel subsidies, it would need to shift its focus to other fuel alternatives, this was according to the Director of the Department of Petroleum Resources (DPR),Sarki Auwalu.
Auwalu noted this at the Q2 2021 business dinner of the Petroleum Club Lagos convened by a proprietary investment company, A. A Holdings. He said, “To eliminate subsidies, what we need is an alternative fuel, and without an alternative, people would be subjected to higher prices and that is why we go for price freedom.
“We are encouraging investors in the sale of gas because we know that once this is achieved, the issue of subsidy and volume would be addressed.”
He added that the country was only operating 1,300 of its 7,000 reservoirs, noting that the Department aimed to achieve refinery revolution as defined under the decade of gas. Auwalu said, “We cannot have 7000 reservoirs and we are only producing from 1300. We cannot afford to stay with a 40 percent recovery factor
We are also optimising the production to ensure that investors get a return on their investments while also reducing the cost of production.
“For the midstream, our focus is to achieve refinery revolution under the decade of gas. We have to shift from a resource cost to a resource use industry and for us to migrate.
“We have to create the need and satisfy the need and that is the essence of the decade of gas. “Today, we have huge additional capacity in domestic refining, so the challenge is that the refining capacity is increasing. We have to increase our production capacity so that we remain the net exporters because we believe this would guarantee and fortify the future.”