Nigeria’s Minister of Information and Culture, Mr. Lai Mohammed has described the angry reactions that have greeted the latest prices of petrol as “unnecessary and totally mischievous”.
The minister told journalists at a news conference on Monday that “the long-drawn fuel subsidy regime ended in March 2020, when the Petroleum Products Pricing Regulatory Agency (PPPRA) announced that it had begun fuel price modulation, in accordance with prevailing market dynamics, and would respond appropriately to any further oil market development”.
Reacting to the plans by the Nigeria Labour Congress and many civil society organisations to protest the increase in the price of petrol and the hike in electricity tariff on Monday in Abuja, he recalled that the price of fuel dropped from N145 to N125 per litre, and then to between N121.50 and N123.50 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.
“With the price of crude inching up, the price of petrol locally is also bound to increase, hence the latest price of N162 per litre. 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 said.
“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,” he said.
According to him, in spite of the recent increase in the price of petrol to N162 per litre, petrol prices in Nigeria remain the lowest in the West/Central African sub-regions.
For instance, in Nigeria a litre sells for N162, while in Ghana, Benin and Togo a litre of petrol sells for N332, N359 and N300 respectively.
“Outside the sub-region, petrol sells for N211 per litre in Egypt and N168 per litre in Saudi Arabia. You can now see that even with the removal of subsidy, fuel price in Nigeria remains among the cheapest in Africa,” he said.
Speaking on the increase in electricity tariff, the minister said “The truth of the matter is that 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 N1.7 trillion, especially by way of supplementing tariffs shortfalls.”
According to him, the government does not have the resources to continue along this path and to borrow just to subsidize generation and distribution, which are both privatized, will be grossly irresponsible.
He noted that despite the recent service-based tariff review, the cost of electricity in Nigeria is still cheaper or compares favourably with that of many countries in Africa.
The minister said that Nigerians pay N49.75 per KWH while in Senegal, Guinea and Liberia it costs N71.17, N41.36 and N206.01 respectively.
The minister noted that the timing of these two necessary adjustments, in the petroleum and power sectors, that has raised some concerns among Nigerians, was “a mere coincidence”.
He blamed the opportunistic opposition and their allies for playing dirty politics with the issue of petrol pricing and electricity tariff, adding that “this government is not insensitive to the current economic difficulties our people are going through and the very tough economic situation we face as a nation”.
GIK/APA