Responding to current protest over the monthly fluctuations and increases in fuel prices countrywide, the Nigerian Government has said it presently lacks money to continue to pay fuel subsidy due to the economic implications of the coronavirus (COVID-19) pandemic.
Minister of State for Petroleum Resources, Timipre Sylva, disclosed this on Thursday in Abuja in a briefing to mark his one year in office.
Sylva explained that government has also resolved to step aside from fixing fuel prices, thus it has decided to merge the Petroleum Products Pricing Regulatory Agency (PPPRA), and the Petroleum Equalisation Fund (PEF).
The minister, who stressed that decision to deregulate the downstream sector, as well as subsidy suspension was not political. He also pointed out that the deregulation policy has saved the country about N1 trillion since it was introduced last March.
His words: “It became necessary that the country cannot sustain subsidy payments, hence the decision to deregulate. Government has stopped subsidising petrol at the pump, but will now play its traditional role of protecting consumers from exploitation, by ensuring that marketers do not profiteer at the expense of ordinary Nigerians and consumers of the product.
“We are no longer in the business of fixing prices; we have stepped back and allowed market forces to determine the prices. Henceforth, if crude oil price goes up or down, it would reflect at the pumps.
“This is about the survival of the country and there are certain things the country can afford at this time. We have cut production to 1.412 million barrels, which had halved our earnings.”
The whole country has been in serious uproar after the announcement this month that fuel will now sell for N161 per litre from up fromN145.
“It is a necessary policy; we would get over this initial pain, with time, we would get past it,” Sylva maintained.
According to him, “the savings of about N1 trillion since the removal of subsidy comes from the expulsion of N500 billion earmarked for subsidy payment in the 2020 budget and the removal of foreign exchange differentials, which saved the country around N500 billion also.”
He emphasized that government will surely roll-out cleaner and cheaper alternatives to premium Motor Spirit, PMS, also known as petrol, such as liquefied Petroleum Gas, Compressed Natural Gas to ameliorate the current hardship of Nigerians.