Be Ready to Bear Pains of High Oil Prices, Sylva Tells Nigerians
SYLVA, MINISTER OF STATE PETROLEUM
By Onyinye Apeh
The Minister of State for Petroleum Resources, Mr. Timipre Sylva, Tuesday said Nigerians should be ready to bear the pains of increasing crude oil prices in the international market which will also determine the cost of pump price of petrol in filling stations.
Sylva said that with new crude price of about $60 per barrel as at Tuesday, this will also affect the cost of fuel in the country.
Speaking on the occasion of the official inauguration of the Nigerian Upstream Cost Optimisation Programme (NUCOP) in Abuja, the Minister made it clear that the Nigerian National Petroleum Corporation (NNPC) cannot continue to bear the cost of subsidy.
But he said that as government revenue continues to improve, the gains will not be wasted on subsidy payment.
He simply told Nigerians to prepare for the pains.
Sylva said, “Since we are optimising everything, NNPC needs to also think about the optimisation of product cost because as we all know, oil prices are where they are today, $60.
“As desirable as this is, this has serious consequences as well on product prices. So, we want to take the pleasure and we should as a country be ready to take the pain. Today the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy.
“So, somewhere down the line, I believe that the NNPC cannot continue to take this blow. There is no way because there is no provision for it. As a country, let us take the benefits of the higher crude oil prices and I hope we will also be ready to take a little pain on the side of higher product prices.
“Average total cost is now below $30/barrel for JV contract and less than $20 for Production Sharing Contracts (PSC). We need to do more. Engagement should reach a consensus on cost reduction.
‘’We are making a case for shared services. Our target is 3mpd daily production and 40 billion barrels reserves.
“We want to position Nigeria as the best designation for investment in the hydrocarbon sector. The benefits of NUCOP are many. It includes reducing the contracting cycle to three months or less, prompting efficiency, profitability and competitiveness. Its success is dependent on the collaboration of stakeholders.”
The Minister of State for Petroleum Resources, Mr. Timipre Sylva, Tuesday said Nigerians should be ready to bear the pains of increasing crude oil prices in the international market which will also determine the cost of pump price of petrol in filling stations.
Sylva said that with new crude price of about $60 per barrel as at Tuesday, this will also affect the cost of fuel in the country.
Speaking on the occasion of the official inauguration of the Nigerian Upstream Cost Optimisation Programme (NUCOP) in Abuja, the Minister made it clear that the Nigerian National Petroleum Corporation (NNPC) cannot continue to bear the cost of subsidy.
But he said that as government revenue continues to improve, the gains will not be wasted on subsidy payment.
He simply told Nigerians to prepare for the pains.
Sylva said, “Since we are optimising everything, NNPC needs to also think about the optimisation of product cost because as we all know, oil prices are where they are today, $60.
“As desirable as this is, this has serious consequences as well on product prices. So, we want to take the pleasure and we should as a country be ready to take the pain. Today the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy.
“So, somewhere down the line, I believe that the NNPC cannot continue to take this blow. There is no way because there is no provision for it. As a country, let us take the benefits of the higher crude oil prices and I hope we will also be ready to take a little pain on the side of higher product prices.
“Average total cost is now below $30/barrel for JV contract and less than $20 for Production Sharing Contracts (PSC). We need to do more. Engagement should reach a consensus on cost reduction.
‘’We are making a case for shared services. Our target is 3mpd daily production and 40 billion barrels reserves.
“We want to position Nigeria as the best designation for investment in the hydrocarbon sector. The benefits of NUCOP are many. It includes reducing the contracting cycle to three months or less, prompting efficiency, profitability and competitiveness. Its success is dependent on the collaboration of stakeholders.”
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