If sworn in as Nigeria’s president in May, Bola Ahmed Tinubu plans to remove the lingering fuel subsidy. However, he will use the recovered funds from subsidy payments to execute the social contract that exists between Nigerians and the government through social welfare programs.
This is according to his “Renewed Hope” campaign manifesto which was released in 2022.
More details: Tinubu said he will fund infrastructural, agricultural, and social welfare programs to help Nigerians ease off the burdens the fuel subsidy removal will cause. These programs range from road construction to boreholes, public transportation subsidies, education, and healthcare funding programs.
Simultaneously, Tinubu will increase the country’s refining capacity by focusing on the rehabilitation of the Kaduna, Port Harcourt, and Warri refineries through joint venture partnership arrangements. He plans to fully deregulate the downstream sector and increase local refining capacity, to ensure the stability of the petroleum products supply in the country.
Increasing Nigeria’s oil production: Tinubu plans to institute a special enforcement unit to increase Nigeria’s oil production to 2.6 million barrels per day by 2027. A part of the manifesto states:
- “To increase domestic crude production, we must have greater success in deterring crude oil theft and preventing vandalism of our pipelines, crude infrastructure, and assets.
- Therefore, we will establish a Special Enforcement and Monitoring Unit whose sole mandate will be to protect the nation’s pipelines by deploying technological interventions (stationary aerial monitoring platforms, drones) towards curbing production disruptions.”
Tinubu has set a goal to take Nigeria’s crude oil production to 2.6 m/bpd by 2027 and 4 m/bpd by 2030. Currently, the country produces an average of 1.6 million barrels per day (m/bpd), according to the GCEO, NNPCL, and Mele Kyari as of February 2023.
Tinubu also plans to boost investments by providing new incentives to sway investors as well as drive public-private sector collaborations in this regard.
In his manifesto, the president-elect describes the country’s oil sector as facing downward pressure on prices and revenues as a result of the global shift towards renewables. He believes the country must act now to prevent the obvious trend from harming Nigeria’s economy.
Tinubu’s plan for host communities: In his campaign manifesto, the president-elect says his administration will ensure an increase in the indigenous share of crude oil production to over 1 m/bpd by 2027.
Tinubu will also ensure the full implementation of the Host Community Development Trust under the Petroleum Industry Act, which mandates greater assistance and cooperation by oil companies with host communities, particularly in the areas of environmental protection, preservation, and rejuvenation.
What you should know: A Tinubu administration will also work to hasten the implementation of the Petroleum Industry Act and implement favorable policies to stimulate investment in the deep-water assets, by encouraging negotiations regarding signature bonus payment and/or deferral of the payment post-development, and royalty reliefs.
