Stakeholders call for oil production subsidy, diversification as oil prices remain low

The current challenges faced by oil dependent countries such as Nigeria have prompted stakeholders in the energy sector to call on the government to subsidise the production of oil rather than its consumption and diversify the economy.

The concerned stakeholders insist that in the face of the declining crude oil price which has affected revenues, there is a need for a cost benefit analysis to x-ray and determine the success and cost effectiveness of the subsidy era.

According to them, the country will need to devise a new suitable and sustainable alternative to oil consumption subsidy to enable it effectively survive the current fall in oil prices globally.

Speaking at the 8th annual Nigerian Association for Energy Economics (NAEE)/International Association for Energy
Economics (IAEE) conference in Ibadan, Governor Abiola Ajimobi of Oyo State argued that with the current global oil and energy challenges, Nigeria needs to ensure a move from over dependency on oil through diversification of the economy to ensure sustainable development.

Ajimobi, who was represented by Moses Adeyemo, deputy governor of Oyo State, posited that the current global energy challenge should not be the responsibility of the government alone, as it requires the involvement of individuals and other players in the oil and energy industry.

Continuing, he noted that energy productivity is very important to the developing countries and the use of a more sustainable energy system across the world, adding that the conference is not only relevant but most appropriate to tackle the challenges which Nigeria and other oil dependent countries are facing as a result of the dynamics in the global energy market.

Adeola Adenikinju, a professor and the president of the Nigerian Association for Energy Economics (NAEE), who spoke to journalists on the sidelines of the conference, affirmed that so many leakages currently exist in the current subsidy regime.

“We need to bring our refineries back so that they can start working because the impacts of subsidy on our foreign exchange and reserves are enormous,” Adenikinju said, adding that the country needs to start seeking new survival
strategy beyond oil.

“We need to start asking what will happen beyond oil, because in the future other energy sources will displace oil,” he said.

The conference with the theme, ‘Future Energy Policy Options: Assessment, Formulation and Implementation’, was aimed at providing a platform for professionals in the academics, government and industry within and outside Nigeria to interact and exchange ideas on current developments in the energy sector.