Angry reactions towards fuel hike is unnecessary, mischievous – Lai Mohammed
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LAI Mohammed, Nigeria’s Minister of Culture and Information, has said that angry reactions by Nigerians over the recent hike in the pump price of Premium Motor Spirit (PMS) also known as petrol were ‘unnecessary and mischievous’.
Mohammed said this during a joint press conference in Abuja with Saleh Mamman, the Minster of Power, and Timipre Sylva, Minister of State for Petroleum Resources, to address the concerns raised by Nigerians over the increase in the pump price and electricity tariff.
“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 angry reactions that have greeted the latest prices of Premium Motor Spirit (PMS) are therefore unnecessary and totally mischievous,” the Minister added.
According to him, ’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’ and which was in accordance with the prevailing market dynamics, and would respond appropriately to any further oil market development.
Mohammed added that the price of fuel had dropped from N145 to N125 per litre, and then to between N121.50 and N123.50 per litre in May due to the low price of crude oil and consumers were left to ‘enjoy’ the then price pump.
“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,” Mohammed said.
“Gentlemen, 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 per cent, due to the downturn in the fortunes of the oil sector.”
The Minister disclosed that that the government has had to sustain expenditures, especially on salaries and capital projects and has 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, one of such difficult decisions, which we 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,” he noted.
He maintained that the government can no longer afford to subsidize petrol prices, because of its many negative consequences which he said include a return to the costly subsidy regime.
“With 60 per cent less revenues today, we cannot afford the cost. The second danger is the potential return of fuel queues – which has, thankfully, become a thing of the past under this Administration.
“The days in which Nigerians queue for hours and days just to buy petrol, often at very high prices, are gone for good. Of course, there is also no provision for fuel subsidy in the revised 2020 budget, because we just cannot afford it,” Mohammed told reporters.
The Federal Government on September 2 announced a new pump price of petrol.
The new pump price, N151.56k was announced in a memo with reference number PPMC/IB/LS/020 issued on Wednesday by by D.O Abalaka of PPMC.