Dr Emmanuel Kachikwu, the new Director of the Nigerian National Petroleum Corporation (NNPC), called for the full deregulation of Nigeria’s oil and gas sector, reported Daily Post Nigeria. “Subsidy creates distortion in government revenue distribution as a result of round-tripping and unnecessary carryover of expenditures every year in a way that is difficult for government to control or sustain,” he said in a speech delivered at the National Association of Energy Correspondents (NAEC) Conference held at the Eko Hotel & Suites, Victoria Island, Lagos.

“Deregulation will provide a fair deal for Nigerians from the abundant petroleum resources, through fair product prices for consumers, full cost recovery, and reasonable margins for operators”, he added, noting that fuel subsidies accounted for 20% of the federal government budget in 2013.

Nonetheless, he cautioned that deregulation alone was not enough: “critical enablers such as security of supply and distribution infrastructure must be assured to guarantee the availability of the petroleum products at affordable prices.”

He was the keynote speaker at the event and his talk was entitled “Energy Crisis and Sustainable Development in Nigeria: The Way Forward”.

According to the Financial Times Kachikwu’s strategy for reforming NNPC – he was appointed by the new president Buhari – is to rely heavily on figures from the private sector. Kachikwu himself is a former ExxonMobil executive.

He did admit, however, that “Too many outsiders all of a sudden would not have been a good strategy,” adding that the state-owned company “will almost certainly bring in more as time goes on”.