Fuel Price, Electricity Tariff Hike Not Intended to Inflict Pains on Nigerians, Says Osinbajo
Vice President Yemi Osinbajo Monday defended the fuel price hike and the new electricity tariffs, saying they were not intended to inflict pains on Nigerians.
The defence is coming after series of concerns and protests by Nigerians over the decision of the government to deregulate the prices of fuel and also increase electricity tariffs which came at a time Nigerians were yet to recover from the coronavirus pandemic that crippled many businesses and led to losses of many jobs.
Osinbajo who spoke on the occasion of a 3-day ministerial retreat in Abuja said it was not true that the administration was insensitive by increasing fuel price and electricity tariffs all at once.
According to him, the fuel subsidy had to be removed to check fuel scarcity in the country.
He assured that at the same time, government would ensure that independent markets do not continue to engage in arbitrary increase in fuel price.
He explained that the current fuel price was as a result of deregulation of the downstream petroleum sector which started earlier in the year with fall in prices of crude oil in the international market.
“The COVID-19 pandemic, which has affected economies globally, has compelled us to make some far-reaching adjustments that may cause some initial pain, but which is necessary for long-term gains. As you all know, when oil prices collapsed at the height of the global lockdown, we deregulated the price of premium motor spirit (PMS) such that the benefit of lower prices was passed to consumers. This was welcome by all and sundry.
“The effect of regulation though is that petrol prices will change with changes in global oil prices. This means, quite regrettably, that as oil prices recover, we would see some increases in petrol prices.
“There are several negative consequences if the government should resume the business of fixing or subsidising petrol prices. First of all, it would mean a return to the costly subsidy regime. Today we have 60 per cent less revenues, we just 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.
“Nigerians no longer have to endure long queues just to buy petrol, often at highly inflated prices. Also, as I hinted earlier, there is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it if reasonable provisions must be made for health, education and other social services. We now have no choice.”
The Vice President represented President Muhammadu Buhari who travelled to Niamey, Niger Republic for the ECOWAS Summit on COVID-19.
The Petroleum Products Pricing Regulatory Agency (PPPRA) had last week increased the ex-depot price of petrol from N138 per litre to N151 which led to major marketers increasing retail price to between N158-N162 per litre.
Similarly, fuel price had also been increased by more than double with effect from September 1.
The defence is coming after series of concerns and protests by Nigerians over the decision of the government to deregulate the prices of fuel and also increase electricity tariffs which came at a time Nigerians were yet to recover from the coronavirus pandemic that crippled many businesses and led to losses of many jobs.
Osinbajo who spoke on the occasion of a 3-day ministerial retreat in Abuja said it was not true that the administration was insensitive by increasing fuel price and electricity tariffs all at once.
According to him, the fuel subsidy had to be removed to check fuel scarcity in the country.
He assured that at the same time, government would ensure that independent markets do not continue to engage in arbitrary increase in fuel price.
He explained that the current fuel price was as a result of deregulation of the downstream petroleum sector which started earlier in the year with fall in prices of crude oil in the international market.
“The COVID-19 pandemic, which has affected economies globally, has compelled us to make some far-reaching adjustments that may cause some initial pain, but which is necessary for long-term gains. As you all know, when oil prices collapsed at the height of the global lockdown, we deregulated the price of premium motor spirit (PMS) such that the benefit of lower prices was passed to consumers. This was welcome by all and sundry.
“The effect of regulation though is that petrol prices will change with changes in global oil prices. This means, quite regrettably, that as oil prices recover, we would see some increases in petrol prices.
“There are several negative consequences if the government should resume the business of fixing or subsidising petrol prices. First of all, it would mean a return to the costly subsidy regime. Today we have 60 per cent less revenues, we just 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.
“Nigerians no longer have to endure long queues just to buy petrol, often at highly inflated prices. Also, as I hinted earlier, there is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it if reasonable provisions must be made for health, education and other social services. We now have no choice.”
The Vice President represented President Muhammadu Buhari who travelled to Niamey, Niger Republic for the ECOWAS Summit on COVID-19.
The Petroleum Products Pricing Regulatory Agency (PPPRA) had last week increased the ex-depot price of petrol from N138 per litre to N151 which led to major marketers increasing retail price to between N158-N162 per litre.
Similarly, fuel price had also been increased by more than double with effect from September 1.
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