FG can no longer afford fuel and electricity subsidy, citizens must bear it-- Lai Mohammed

 

The Federal Government says under the prevailing economic conditions it can no longer afford fuel subsidy and supplementing electricity tariff. The Minister of Information and Culture, Alhaji Lai Mohammed, who disclosed this at a media briefing in Abuja said the nation’s revenues and foreign exchange earnings have fallen by almost 60 percent due to the downturn in the fortunes of the oil sector.News Agency of Nigeria (NAN) reports the media briefing, which was on the recent increases in petrol and electricity prices, was jointly addressed by the Minister of Power, Saleh Mamman, and Minister of State Petroleum, Timipreye Sylvia.

Mohammed said that despite the economic situation, the government sustained expenditures, especially on salaries and capital projects, and stopped unsustainable practices that were weighing the economy down.

Government can no longer afford to subsidize petrol prices, because of its many negative consequences; these include a return to the costly subsidy regime.

“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,” he said.

The Minister disclosed that from 2006 to 2019, fuel subsidy gulped N10.413 trillion, an average of N743.8 billion per annum.

He said from the figures provided by the NNPC, subsidy was N257 billion in 2006,  N272billion in 2007, N631 billion in 2008, N469 billion in 2009, N667billion in 2010, N2.105 trillion in 2011, and N1.355 trillion in 2012.

He added that fuel subsidy gulped N1.316 trillion in 2013, N1.217 trillion 2014, N654 billion in 2015, N144.3 billion in 2017 N730.86 billion in 2018 N595 billion in 2019 while the figure was not available in 2016.

Mohammed said the long-drawn fuel subsidy regime ended in March 2020, with the Petroleum Products Pricing Regulatory Agency (PPPRA) announcement.

He recalled the PPPRA announced that it began fuel price modulation, in accordance with prevailing market dynamics, and would respond appropriately to any further oil market development.

“Recall that the price of fuel then 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.

“The angry reactions that have greeted the latest prices of Premium Motor Spirit (PMS) are therefore unnecessary and totally mischievous,” he said.

The minister said that the Government is not unmindful of the pains associated with higher fuel prices and it will continue to seek ways to cushion the pains, especially for the most vulnerable Nigerians.