Tinubu says fuel subsidy removal necessary for energy security, economic prosperity

President Bola Tinubu has reiterated that his administration’s decision to remove subsidy on Premium Motor Spirit (PMS) aims to ensure long-term energy security and economic prosperity for Nigeria.

In a statement, Oluwakemi Ogunmakinwa said the President made this declaration in his keynote address at the opening ceremony of the 7th Nigerian International Energy Summit (NIES) at the Banquet Hall of the Presidential Villa, Abuja on Tuesday.

Represented by the Minister of Information and National Orientation, Mohammed Idris, at the event, the President acknowledges that the petroleum subsidy has strained the country’s economic resources over the years, leading to inefficiencies and hindering the ability to invest in critical areas of energy security.

Tinubu acknowledges that removing the petroleum subsidy was a challenging decision but emphasizes that it is necessary to secure Nigeria’s energy future and foster economic growth.

He added that his government is creating a more transparent and accountable energy sector by removing the subsidy.

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According to him, the funds previously allocated to subsidizing petroleum products are now redirected towards developing and upgrading our energy and other social infrastructure.

The President stated, “While we are immersed in energy security, let us not forget that Energy Transition is another key aspect of our discussions. We stand on the brink of a new era, where traditional energy sources are being complemented and, in some cases, replaced by cleaner and more sustainable alternatives. This transition is not only an environmental necessity but also an economic opportunity. We must leverage innovation and collaboration to ensure a smooth and just transition that will leave no one behind”.

Highlighting some of the gains of the removal of the subsidy, the President mentioned that the private sector has been encouraged to participate in the energy industry with the potential of attracting more local and international investors, fostering innovation, and competition that will drive down costs and improve the overall efficiency of our energy sector.

In his address at the opening ceremony, the Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, advocated for a shift towards the vast potential that lies in Nigeria’s gas sector.

He emphasised that the shift towards gas is not merely an option but a necessity for the country’s economic resilience, adding that the gas industry presents a unique opportunity to diversify revenue streams, reduce dependence on oil, and create a more robust and sustainable economic foundation.