The Minister of Information and Culture, Alhaji Lai Mohammed has said that in spite the recent increase in price of fuel to 162 Naira per litre, petrol prices in Nigeria remain the lowest in West and Central African sub-region, adding that with the removal of subsidy, still fuel price in Nigeria remains among the cheapest in Africa.
The Minister disclosed this at the Press Conference in Abuja on Monday, he said with the price of crude inching up, the price of petrol locally is also bound to increase, while If, perchance, the price of crude drops again, the price of petrol will also drop, and the benefits will also be passed on to the consumers.
He added that the angry reactions greeted the latest prices of Premium Motor Spirit (PMS) are therefore unnecessary and totally mischievous. “The truth of the matter is that subsidizing fuel is no longer feasible, especially under the prevailing economic conditions in the country. The government can no longer afford fuel subsidy, as revenues and foreign exchange earnings have fallen by almost 60%, due to the downturn in the fortunes of the oil sector.
“Yet, the government has had to sustain expenditures, especially on salaries and capital projects. Even though we have acted to mitigate the effect of the economic slowdown by adopting an Economic Sustainability Plan, we have also had to take some difficult decisions to stop unsustainable practices that were weighing the economy down.
“Recall that the price of fuel then dropped from 145 to 125 Naira per litre, and then to between 121.50 and 123.50 Naira per litre in May. With the low price of crude oil then, the cost of petrol, which is a derivative of crude oil, fell, and the lower pump price was passed on to the consumers to enjoy”, he said.He noted that one of the difficult decisions, Government took at the beginning of the Covid-19 pandemic in March when oil prices collapsed at the height of the global lockdown was the deregulation of the prices of PMS. “The benefit of lower prices at that time was passed to consumers. Everyone welcomed the lower fuel price then.
“Again, the effect of deregulation is that PMS prices will change with changes in global oil prices. This means quite regrettably that as oil prices recover, there will be some increases in PMS prices. This is what has happened now. The Federal Government is not unmindful of the pains associated with higher fuel prices at this time. That is why we will continue to seek ways to cushion the pains, especially for the most vulnerable Nigerians”, he said.
On electricity tariffs, Alhaji Lai said this is due to the problems with the largely-privatized electricity industry, the government has been supporting the industry. “To keep the industry going, the government has so far spent almost 1.7 trillion Naira, especially by way of supplementing tariffs shortfalls. The government does not have the resources to continue along this path. To borrow just to subsidize generation and distribution, which are both privatized, will be grossly irresponsible.
“But in order to protect the large majority of Nigerians who cannot afford to pay cost-reflective tariffs from increases, the industry regulator, NERC, has approved that tariff adjustments had to be made but only on the basis of guaranteed improvement in service. Under this new arrangement, only customers with guaranteed minimum of 12 hours of electricity can have their tariffs adjusted. Those who get less than 12 hours supply will experience no increase”.