Tinubu Condemns Nigeria’s Oil-Linked Budget, Promises To Increase Output, End Fuel Subsidy
Nigeria’s All Progressive Congress [APC] presidential hopeful, Senator Bola Ahmed Tinubu, has said that he is aiming to scale up oil production and phase out the fuel subsidy regime in the country.
In his manifesto, unveiled last week, the former governor of Lagos state stated that while Nigeria should boost production, the country should target 2.6million barrels per day of oil by 2027 and 4m bpd by 2030. Of the 2027 target, 1million bpd would come from indigenous producers, he posits
“Not only does this practice artificially restrict the federal government’s fiscal latitude, it also unduly attracts the nation’s attention towards a single source of fiscal revenue to the detriment of others,” the manifesto said about dependence on oil revenue.
He argued that Nigeria should base its budget on the projected level of spending, optimising growth and jobs while controlling inflation. “We must break the explicit link between naira expenditure and dollar inflows into the economy”, Tinubu said
His administration would see higher spending, the manifesto said. Suspending limits on government’s outgoings, he said, was realistic given this “protracted moment of global economic turmoil exacerbated by domestic challenges in security, economy and demography”.
According to him, a move away from an oil-based budget would also be practical given the expected changes in oil and gas consumption as the West aims to reduce consumption.
The first step in Tinubu’s plan is to deter crude oil theft and tackle vandalism. He spoke about establishing a Special Enforcement and Monitoring Unit to protect pipelines through a variety of means.
The plan for the oil sector covers new investments in the sector, in particular on frontier exploration. Tinubu said the Lake Chad Basin, in the north, was one area that would attract spending. He promised to also bring in “favourable policies” to attract investment in deepwater assets, with the aim of securing new plans within six months. Strategies under consideration include talks on signature bonuses or royalty relief.
Also Read: Nigeria: Fuel Subsidy Regime To End 2023
On gas flaring, APC presidential hopeful said Nigeria must make progress in flaring gas and increasing use. Nigeria will press ahead with its gas projects, in addition to enforcing gas flaring penalties and providing incentives to those that curb flares.
He said his administration, if elected, would create another unit to investigate flaring and assess compliance in Nigeria.
On fuel subsidy, Ahmed Tinubu said his government would phase out the subsidy, but keep the underlying social contract. “Cash that goes on the subsidy would instead target particular programmes, in order to better address urgent social and economic needs” he stated
The government would also consider new models for refining, particularly through joint ventures with global companies.
The PDP’s Atiku Abubakar and the Labour Party’s Peter Obi have also both pledged to remove the subsidy.
There are around 120 days to go until the presidential elections.