Nigeria’s Increased Petrol Worth Least expensive In West Africa, Angry Reactions Pointless – Lai Mohammed

The Minister of Data and Tradition, Lai Mohammed, has defended the choice of the federal government to extend the worth of Premium Motor Spirit (PMS), also referred to as petrol.

He attributed the increased amount to the worldwide worth of crude oil, saying the “angry reactions” which have greeted the latest petrol worth have beenpointless and completely mischievous”.

Mohammed made the remarks on Monday at a press convention in Abuja on the current will increase in petrol price and electricity tariff.

He defined that with the worth of crude creeping up, petrol worth was equally sure to extend, therefore the newest price of N162 per litre.

The minister, nevertheless, believes if the worth of crude drops once more, the worth of petrol will even drop and the advantages will even be handed on to the customers.

He stressed that regardless of the current increase within the worth of petrol, that of Nigeria has remained the bottom within the West and Central African sub-regions.

According to Mohammed, petrol is being offered for N211 per litre and N168 per litre in Egypt and Saudi Arabia respectively.

On the hike in electrical energy tariff, he described the rise as a service-based adjustment by the Distribution Corporations (DISCOS).

The minister acknowledged that because of the issues with the largely-privatised electrical energy trade, the Federal Authorities has been supporting the sector.

He stated whereas the federal government has to date spent virtually N1.7 trillion, particularly by means of supplementing tariffs shortfalls and doesn’t have the sources to proceed, borrowing to subsidise technology and distribution which have been privatised can be grossly irresponsible.

 

Read the minister’s full remarks on the press briefing under:

TEXT OF THE PRESS CONFERENCE ADDRESSED BY THE HON MINISTER OF INFORMATION AND CULTURE, ALHAJI LAI MOHAMMED, IN ABUJA ON MONDAY, 7 SEPT. 2020 ON THE RECENT INCREASES IN PETROL AND ELECTRICITY PRICES

PROTOCOL

Gentlemen of the press, good afternoon, and thanks for honouring our invitation to this press convention, which we have called to address the current issues surrounding the price of fuel and electricity tariff.

FUEL PRICES

  1. As you might be aware, the long-drawn fuel subsidy regime ended in March 2020, when the Petroleum Products Pricing Regulatory Company (PPPRA) introduced that it had begun fuel price modulation, in accordance with prevailing market dynamics, and would respond appropriately to any further oil market development.
  2. Recall that the price of fuel then dropped from 145 to 125 Naira per litre, after which to between 121.50 and 123.50 Naira per litre in May. With the low worth of crude oil then, the price of petrol, which is a by-product of crude oil, fell, and the decrease pump worth was handed on to the customers to take pleasure in.

With the price of crude inching up, the price of petrol domestically can also be sure to extend, therefore the newest price of 162 Naira per litre. If perchance, the price of crude drops once more, the price of petrol will even drop, and the advantages will even be handed on to the customers.

The indignant reactions which have greeted the newest costs of Premium Motor Spirit (PMS) are due to this fact pointless and completely mischievous.

  1. Gentlemen, the reality of the matter is that subsidizing fuel is no longer possible, particularly underneath the prevailing financial circumstances within the nation.

The federal government can now not afford fuel subsidy, as revenues and overseas exchange earnings have fallen by virtually 60%, because of the downturn within the fortunes of the oil sector. But, the federal government has had to maintain expenditures, particularly on salaries and capital tasks.

Although now we have acted to mitigate the impact of the financial slowdown by adopting an Financial Sustainability Plan, now we have additionally needed to take some troublesome choices to cease unsustainable practices that have been weighing the financial system down.

  1. One among such troublesome choices, which we took firstly of the Covid-19 pandemic in March – when oil costs collapsed on the peak of the worldwide lockdown – was the deregulation of the costs of PMS.

As I stated earlier, the good thing about decrease costs at the moment was handed to customers. Everybody welcomed the decrease fuel worth then. Once more, the impact of deregulation is that PMS costs will change with modifications in world oil costs.

This implies fairly regrettably that as oil costs recuperate, there might be some will increase in PMS costs. That is what has occurred now.

  1. Authorities can no longer afford to subsidize petrol costs, due to its many adverse penalties. These include a return to the expensive subsidy regime. With 60% much less revenues as we speak, we can not afford the fee. The second hazard is the potential return of fuel queues – which has, fortunately, turn into a factor of the previous underneath this Administration.

The times wherein Nigerians queue for hours and days simply to purchase petrol, typically at very excessive costs, are gone for good. In fact, there’s additionally no provision for fuel subsidy within the revised 2020 finances, as a result of we just cannot afford it.

  1. Gentlemen, the price of fuel subsidy is just too high and unsustainable. From 2006 to 2019, fuel subsidy gulped 10.413 Trillion Naira. That’s a mean of 743.8 billion Naira each year.

In accordance with figures supplied by the NNPC, the breakdown of the 14-year subsidy is as follows:

– In 2006       Subsidy was 257bn

– In 2007       Subsidy was 272bn

– In 2008       Subsidy was 631bn

– In 2009       469bn

– In 2010       667bn

– In 2011       2.105tn

– In 2012      1.355tn

– In 2013      1.316tn

– In 2014      1.217tn

– In 2015       654bn

– In 2016       Figure Not Available

– In 2017      Subsidy was 144.3bn

– In 2018      730.86bn

– And in 2019   Subsidy was 595bn

  1. The Federal Authorities just isn’t unmindful of the pains related to increased fuel costs presently. That’s the reason we’ll proceed to hunt methods to cushion the pains, particularly for essentially the most weak Nigerians.

The federal government is offering cheaper and extra environment friendly fuel in form of autogas. Additionally, Authorities, by means of the PPPRA, will be sure that entrepreneurs don’t exploit residents by means of arbitrarily hike in pump costs.

And that’s the reason the PPPRA introduced the vary of costs that should not be exceeded by entrepreneurs.

9   Despite the current improve within the price of fuel to 162 Naira per litre, petrol costs in Nigeria stay the bottom within the West/Central African sub-regions.

Beneath is a comparative evaluation of petrol costs within the sub-regions (Naira equal per litre);

– Nigeria              – 162 Naira per litre

–  Ghana               –  332 Naira per litre

–  Benin                 – 359 Naira per litre

–  Togo                   – 300 Naira per litre

–  Niger                   – 346 Naira per litre

–  Chad                   – 366 Naira per litre

–  Cameroon           – 449 Naira per litre

–  Burkina Faso      –  433 Naira per Litre

–  Mali                     – 476 Naira per litre

– Liberia                 – 257 Naira per litre

– Sierra Leone        – 281 Naira per litre

– Guinea                 – 363 Naira per litre

– Senegal               – 549 Naira per litre

  1. Outside the sub-region, petrol sells for 211 Naira per litre in Egypt and 168 Naira per litre in Saudi Arabia.

Now you can see that even with the removing of subsidy, fuel price in Nigeria stays among the many most cost-effective in Africa.

ELECTRICITY TARIFF

  1. One other situation we need to tackle right here as we speak is the current service-based electrical energy tariff adjustment by the Distribution Corporations or DISCOS.

The reality of the matter is that because of the issues with the largely-privatised electrical energy trade, the federal government has been supporting the trade.

To maintain the trade going, the federal government has to date spent virtually 1.7 trillion Naira, particularly by means of supplementing tariffs shortfalls. The federal government doesn’t have the sources to proceed alongside this path.

To borrow simply to subsidise technology and distribution, that are each privatized, might be grossly irresponsible.

  1. However to be able to defend the massive majority of Nigerians who can not afford to pay cost-reflective tariffs from will increase, the trade regulator, NERC, has authorised that tariff changes needed to be made however solely on the premise of assured enchancment in service.

Below this new association, only customers with guaranteed minimum of 12 hours of electrical energy can have their tariffs adjusted. Those that get lower than 12 hours provide will experience no increase.

This is the largest group of customers.

  1. Government has also noted the complaints about arbitrary estimated billing. Accordingly, a mass metering programme is being undertaken to provide meters for over 5 million Nigerians, largely driven by preferred procurement from local manufacturers, and creating 1000’s of jobs within the course of.

NERC will even strictly implement the capping regulation to make sure that unmetered clients will not be charged past the metered clients of their neighbourhood. In different phrases, there might be no extra estimated billings.

  1. The federal government can also be taking steps to attach these Nigerians who will not be even linked to electrical energy in any respect. As you might be conscious, underneath its Financial Sustainability Plan, the federal government is offering solar energy to five million Nigerian households within the subsequent 12 months.

This alone will produce 250,000 jobs and affect as much as 25 million beneficiaries by means of the set up, thus making certain that extra Nigerians can have entry to electrical energy through a dependable and sustainable photo voltaic system.

  1. Gentlemen, please be aware that regardless of the recent service-based tariff review, the price of electrical energy in Nigeria remains to be cheaper or compares favourably with that of many nations in Africa.

COST IN NAIRA PER KWH IN SOME AFRICAN COUNTRIES.

– Nigeria            49.75

– Senegal          71.17

– Guinea            41.36

– Sierra Leone   106.02

– Liberia              206.01

– Niger                59.28

– Mali                  88.23

– Burkina Faso    85.09

– Togo                  79.88

CONCLUSION

  1. Gentlemen, the timing of those two vital changes, within the petroleum and energy sectors, has raised some issues amongst Nigerians. It is a mere coincidence.

First, the deregulation of PMS costs was introduced on 18 March 2020, and the price modulation that took place at the beginning of this month was simply a part of the on-going month-to-month changes to world crude oil costs.

  1. Additionally, the evaluation of service-based electrical energy tariffs was scheduled to begin firstly of July 2020 however was placed on maintain in order that additional research and correct preparations may be made.

Like Mr President stated as we speak, on the opening of the Ministerial Retreat, this government is not insensitive to the present financial difficulties our people are going through and the very powerful economic situation we face as a nation. We certainly will not inflict hardship on our people.

However we’re satisfied that if we keep targeted on our plans, brighter and extra affluent days will come quickly.

  1. The opportunistic opposition and their allies are playing dirty politics with the issue of petrol pricing and electricity tariff.

Please be aware that these naysayers didn’t complain when the worth adjustment led to decrease petrol costs on at least two occasions since March.

Nigerians should due to this fact surrender those that have latched onto the difficulty of petrol pricing and electrical energy tariff evaluation to throw the nation into chaos.

19. I thank you all for your kind attention

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