Energy
Fossil Fuel Subsidies Hamper Pathway to Inclusive Green Economy – Experts
By URIRI Leo
NAIROBI – According to experts, Fossil fuel subsidies are contributing to fiscal instability and undermining governments’ efforts to combat serious economic and environmental challenges, such as climate change, and the transition to an inclusive green economy.
“Reforming Fossil Fuel Subsidies for an Inclusive Green Economy” is the theme of the two-day event co-organized by UNEP, IMF, GIZ and the Global Subsidies Initiative of IISD. Sessions will focus on how fiscal policies can address the perverse effects of fossil fuel subsidies and strengthen government spending for sustainable development.
The Intergovernmental Panel on Climate Change recently reported that CO2 emissions from fossil fuel combustion and industrial processes were responsible for approximately 78 per cent of the total increase in greenhouse gas emissions between 1970 and 2010.
Experts say reducing or eliminating harmful fossil fuel subsidies – and properly pricing energy to account for environmental impacts – is one of the most promising ways governments can promote a transition to a greener economy, and even the playing field for investments in energy efficiency and renewable energy.
Subsidies to producers often support inefficient state-owned energy companies and stifle incentives for greater efficiencies and innovation, while subsidies to consumers often encourage excessive consumption, which has knock-on effects for pollution, human health and greenhouse gas emissions.
Globally, fossil fuel subsidies are estimated to be in the range of US$500 billion. When taking into account implicit subsidies from the failure to charge for pollution, climate change and other externalities, the IMF estimates the post-tax subsidy figure is closer to $2 trillion worldwide – equivalent to about 2.9 per cent of global GDP, or 8.5 per cent of government revenues. Furthermore, it finds the removal of such subsidies could lead to a 13 per cent decline in CO2 emissions.
In comparison, according to the International Energy Agency, global subsidies to the renewable energy industry were $88 billion in 2011.
“Fiscal policies are of particular importance in a green economy transition. Confronted by a fiscally constrained world, government reforms might appear to be a daunting challenge,” said UN Under-Secretary-General and UNEP Executive Director Achim Steiner.
“However, it is important to note that fossil fuel subsidies cost countries precious funds. For example, they divert government resources from pro-poor spending in Africa, where governments spend an estimated 3 per cent of GDP – equivalent to their total health care allocation – on fossil fuel subsidies,” he added.
Several countries, including Ghana, Namibia, the Philippines and Turkey, have all shown that it is possible to reform energy subsidies and prices. UNEP is currently undertaking green economy fiscal policy studies in several countries, including Ghana, Kenya and Mauritius, which will inform the respective governments as they advance their fiscal policy reforms.
Experts are calling on governments to use government policies to leverage private investment in green sectors by redirecting public investments to clean technologies and providing direct public expenditure for research and development. For example, tax incentives could make investments in clean technologies more attractive, while government funds could reduce the risk profile of capital intensive new technologies.
In addition, experts acknowledge that, in some cases, eliminating these subsidies could have ramifications on the poor or weaken the competitiveness of domestic industries. Therefore, they said, social protection measures are needed to ensure vulnerable groups are not overlooked and receive assistance during a transition period.
The Shell Nigeria Exploration and Production Company Limited (SNEPCo) has completed the turnaround maintenance on the Bonga Floating Production, Storage and Offloading (FPSO) vessel, leading to resumption of production at Nigeria’s premier deepwater field on March 6, 2026.
Biztellers reports that the project was delivered 11 days ahead of schedule and without any safety incident, reinforcing SNEPCo’s longstanding commitment to operational excellence and asset integrity.
“Completing the turnaround safely and ahead of schedule is a testament to the dedication and professionalism of our Nigerian workforce and the helpful support of our partners,” SNEPCo Managing Director Ronald Adams said. “The achievement not only secures the long‑term integrity of the Bonga FPSO but also positions us strongly for the successful delivery of the Bonga North project, which will leverage the improved reliability of the FPSO.”
The exercise which began on February 1, 2026, highlights SNEPCo’s leading role in advancing deep‑water expertise in Nigeria. Of the 55 companies involved in the execution, 43 were wholly Nigerian. Additionally, eight of the 12 international service providers maintain operational bases in Nigeria, contributing to knowledge transfer and increased local investments.
More than 1,000 personnel worked offshore during the turnaround, with over 95% being Nigerians involved in maintenance, engineering, operations, inspection and construction. Thousands more supported activities from onshore locations, reflecting the depth of Nigerian capability in offshore oil and gas operations.
Adams added: “We acknowledge the support of several stakeholders towards the successful execution of the exercise, including the NNPC Upstream Investment Management Services (NUIMS), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Content Development and Monitoring Board (NCDMB) and our partners.”
Modupe Asudo
Sahara Group, a leading global energy and infrastructure conglomerate, has commissioned MT Asharami Ghana, a 40,000‑cubic‑metre Liquefied Petroleum Gas (LPG) carrier, expanding its fleet capacity, while strengthening Ghana’s clean energy supply chain and LPG distribution network.
The dual‑fuel vessel improves operational efficiency, enhances supply reliability, and supports lower‑emission LPG logistics as consumption grows across Ghana and the wider sub‑region.
Ghanaian President Mahama and Sahara Executive Directors
Speaking at the commissioning in Ulsan, South Korea, President John Dramani Mahama described the vessel as “a significant milestone in strengthening the infrastructure that underpins the global LPG supply chain,” noting that expanded shipping capacity is critical to improving supply security, reliability and efficiency for countries that rely partly on LPG imports.
He commended Sahara Group, WAGL Energy and all partners involved for their “leadership, technical expertise and strategic foresight,” adding that the project reflects “the power of partnership” in advancing safe, efficient, and responsible energy distribution.
President Mahama wished the MT Asharami Ghana safe sails, expressing confidence that the vessel would inspire further investment and collaboration across Africa’s energy value chain.
According to Wale Ajibade, Executive Director, Sahara Group, the vessel supports Ghana’s clean energy ambitions through integrated infrastructure.
“MT Asharami Ghana is more than a vessel; it is part of a deliberate strategy to strengthen LPG supply security and support Ghana’s clean energy ambitions. It secures an additional 25,000-Metric-tonne stock security for the Ghana economy, alongside the soon to be commissioned 6000-metric-tonee of 12.000-metric-tonne land storage in Tema,” he said.
With the addition of Asharami Ghana, Sahara Group’s LPG carrier fleet now comprises six delivered vessels with a combined capacity of 202,000 cubic metres. Supported by partnerships with WAGL Energy, NNPC Limited and other stakeholders, an additional 270,000 cubic metres of capacity is under construction and due for delivery by September 2028.
Temitope Shonubi, Executive Director, Sahara Group, said Asharami Ghana is part of Sahara’s integrated LPG infrastructure strategy spanning shipping, storage, and downstream distribution globally, including the development of a 12,000‑metric‑tonne land‑based LPG storage terminal in Tema, with a 6,000‑metric‑tonne first phase scheduled for completion in May 2026.
He thanked Yaa Serwaa Alifo, MD of Asharami Ghana, for her resilience and insistence to dedicate a ship of “this magnitude solely to the Ghana Market and its landlocked neighbours.”
Ghana is targeting LPG adoption of 50 per cent of households by 2030, up from about 30 per cent today. Sahara’s investments will support clean energy access for more than 35 million people, while strengthening Ghana’s role in regional LPG trade to neighbouring and landlocked West African markets.
The commissioning comes in Sahara Group’s 30th anniversary year, guided by the Sahara Beyond XXX milestone, underscoring Sahara’s focus on building an enduring enterprise that delivers responsible growth, shared prosperity and long‑term impact across its markets.
Nigeria’s crude oil production dropped to 1.31 million barrels per day in February, even as local refineries continue to grapple with inadequate domestic crude supply needed to sustain operations.
The development shows that Nigeria again failed to meet its crude oil production quota of 1.5 million barrels per day approved by the Organisation of the Petroleum Exporting Countries (OPEC), as output declined sharply in February 2026.
Data from OPEC’s latest Monthly Oil Market Report, based on direct communication from member countries, showed that Nigeria produced 1.314 million barrels per day in February, down from 1.459 mbpd recorded in January.
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The figures indicate a month-on-month decline of 146,000 barrels per day, widening the country’s shortfall from its OPEC production allocation.
Nigeria’s inability to meet its OPEC production quota is not only affecting its oil export earnings but also adversely impacting domestic refineries that are starved of feedstock for their operations.
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