The Federal Government, according to the Minister of State for Petroleum Resources, Chief Timipre Sylva, has started the process of full deregulation of the downstream sector and by implication, removal of subsidies on products.
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He said the process is the outcome of the enactment of the Petroleum Industry Act 2021.
He said the measure would free funds for national development and investment in renewable energy that is part of the energy mix that fuels the economy.
His words: “The government is in the process of fully deregulating the downstream petroleum sector which will end subsidies and free up funds for national development, including investment in renewables which will be part of the energy mix that ultimately powers our economy.”
He spoke at the Seplat Energy Plc Energy Summit 2021 in Abuja.
The theme of the summit was “Global Trend in Energy Transition and the Fiscal Perspective.”
The minister, who expressed support for the global energy transition plan, however, noted that Nigeria rejected the idea of a single pathway to it.
He said the Federal Government prefers the idea of just energy transition that considers the peculiar circumstances of each nation in developing the energy transition pathway that best attains environmental, social, political and economic objectives of each nation.
Sylva sought pathway to the energy transition in order to ensure no nation is left behind.
The minister said: “This is why in Nigeria, we reject the concept of a single pathway to the energy transition. Indeed, we prefer the concept of ‘just’ energy transition which takes into cognisance the specific circumstances of each nation in developing the energy transition pathway that best achieves the environmental, social, political and economic objectives of the transition in that specific nation.
“Multiple pathways to the energy transition should and must exist in order to ensure that no country is left behind in the process of achieving net-zero by 2050.”
He explained that in Nigeria, the position above recognises the possibility of a structural decline in the price of oil and consequential fiscal vulnerabilities that may arise, as well as the increased risk exposure therefrom, and is responding to it in several ways.
Sylva identified that there is the focus on gas as part of the energy transition, which represents the first step in the journey to renewables away from oil
He noted that already the government has declared that gas is its transition fuel, and also represents a destination fuel, as it envisages that it will be part of its energy mix by 2050, given the vast resources that can be commercialised and utilised.
He recalled that at the Seplat Energy Summit in 2020, he spoke about the challenges that the Covid-19 pandemic posed to the global oil and gas industry and, in particular, the impact on the Nigerian operations.
He noted that he spoke on the strategies for sustaining business resilience and sustainability to enable Nigeria navigate the global crisis; measures that included the curtailment of oil production in response to OPEC+ initiative to rebalance and stabilise the global markets.
He reminded the participants that the aim of the production cut was achieved as oil prices rebounded from its 2020 lowest point of $10/bbl (as at 21st April 2020) to $43/bbl (as at 23rd July 2020).
Sylva said coincidentally, just a week before the Seplat Energy Summit which held on 30th July 2020, and oil price has continued on the upward trend to the current $80/bbl (as at 6th October 2021).
Meanwhile, Vice President Yemi Osinbajo, who was represented by the Minister of State for Environment, Barr Sharon Ikeazor, said climate change is affecting several aspects of lives.
He recalled that Nigeria was part of the Paris Agreement on Climate Change, noting there must be a consideration of different realities.
Gas, according to him, will play a vital role in the energy transition.
He said that the energy transition provides employment opportunities.
He revealed that the energy sector is facing, it will decentralize to renewables.
The Vice President added that there is need to expand renewable energy for power supply.
According to him, there is need to change the electricity infrastructure for transportation.
In his opening remarks, the Seplat Energy Plc, chairman, ABC Orjiakor noted that the theme of the summit meant so much to the firm.
He said owing to the company’s commitment to carbon neutrality, it changed its name to Energy.
According to him, Seplat which accounts for 30 per cent gas production in Nigeria has planned to raise it to 50 per cent by 2022.
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