Nigeria’s Vice-President, Prof. Yemi Osinbajo, has lamented that the oil production agreement by the Organisation of Petroleum Exporting Countries (OPEC) and its allies has resulted in lower revenue generation for the Nigerian government.Speaking at the 38th Annual International Conference and Exhibition of the Nigerian Association of Petroleum Explorationists on Tuesday, Prof, Osinbajo said that the country through its Ministry of Petroleum Resources had the mandate to drastically reduce the unit cost of crude oil production in the country in order to increase government revenue.
Represented by the Minister of State for Petroleum Resources, Mr. Timipre Sylva, Prof, Osinbajo said: “It is imperative that in our current era of scarce resources, we should aim at a unit cost of production in single digit.”
He noted that the collapse in crude oil demand due to the COVID-19 pandemic caused the recent sudden slump in oil prices and this has largely resulted in lower revenue generation for the Nigerian government.
Local media reports on Tuesday quoted Osinbajo as saying that Nigeria t would achieve the desired goal of finding more hydrocarbon deposits in the Nigerian basins, notwithstanding the curtailment in production.
Meanwhile, the Minister of State for Petroleum Resources, Mr. Timipre Sylva, has said the earnings, from oil and non-oil sectors coupled with low revenue receipts from the Federal Inland Revenue Service (FIRS), have dropped by 60 percent, putting the nation’s economy under serious pressure.
Speaking after a closed door meeting with President Muhammadu Buhari at the State House, Abuja, on Monday, Mr. Sylva told State House correspondents that the revenue being generated by the FIRS had also reduced drastically due to the negative consequences of the COVID-19 pandemic in the country.
The minister, who acknowledged that the current socio-economic challenges had made life more difficult for Nigerians, appealed for more understanding as the government was determined to uplift the quality of life of the people.
On the sudden increase in the price of petrol, he said: “Let us first agree, that these are not the best of times not only for Nigeria, but for the global community.
“What we have said over and over again as a government is that government is no longer in the business of fixing pump price that is the meaning of deregulation and stepping back on subsidy.
“Yes, we are very aware that this will result in some increase, but why do we have to do this, because it is clearly impossible for government to continue to subsidize,” local media reports quoted the minister as saying.
The minister added that the government’s earnings have reduced by 60 percent and that ”our FIRS collection has also reduced because less oil is being produced, there is less activity in the oil industry which is driving the economy. So you find out it is a double whammy from all sides”.