The federal government yesterday stepped up efforts on two fronts to douse tensions generated by the double whammy of the increase in petrol pump price and electricity tariffs with Vice President Yemi Osinbajo saying the hike in the cost of the two items was not to inflict pains on Nigerians.
A coterie of ministers also pleaded with Nigerians to show understanding of the delicate situation that led to the increase in the petrol price and electricity tariffs, saying despite the new cost regime, the cost of the two commodities are still cheaper in Nigeria than in any other African country
.But a former Chairman of the Asset Management Company of Nigeria (AMCON), Mr. Mustapha Chike-Obi, has punctured the popular belief that fixing the nation’s refineries would translate into cheaper petrol for Nigerians.
Yesterday’s interventions by Osinbajo and the ministers are the fourth since last week when the Petroleum Products Pricing Regulatory Agency (PPPRA) jacked up the ex-depot price of petrol from N138 per litre to N151, inducing a shift in the retail cost of the commodity from between N145-N148 to the extant N158-N162 band.
Earlier, a new tariff regime in the power sector, under which the price of a kilowatt per hour of electricity had more than doubled, had taken effect from September 1.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, had last Thursday shed light on why the federal government was forced to stop fuel subsidy, saying it constituted a drain on the country’s meagre resources.
She had explained that all the decisions were geared towards weathering the current headwinds posed by the COVID-19 pandemic.
The presidency followed up with a statement on Sunday in which it said but for a myriad of economic challenges caused by the COVID-19 pandemic, the president would not have allowed the rise in the pump price of petrol to protect the vulnerable.
It stated that history would be kind to President Muhammadu Buhari for summoning the courage to make such a hard decision that would save Nigeria from economic ruination.
However, the vice president, at the opening of a three-day ministerial retreat in Abuja disclaimed insinuations that the Buhari administration was insensitive by hiking fuel price and electricity tariffs at the same time.
He explained that the fuel subsidy was removed to avert the return of fuel queues and the attendant man-hour loss.
Osinbajo represented Buhari to declare open the retreat, following the president’s trip to Niamey, Niger Republic capital to attend the ECOWAS Summit on COVID-19.
He said in view of the subsidy removal, fuel price would continue to rise as the cost of crude oil recovers in the international market.
He, however, explained that the government would not allow independent marketers to take advantage of the situation by arbitrarily hiking petrol price.
According to him, the current hike in fuel price is not a fresh development, but rather a product of deregulation of the downstream petroleum sector earlier in the year following the fall in the prices of crude oil in the international market because of the effects of COVID-19 on the global economy.
He said following the deregulation, the pump price of petrol would always rise when the prices of crude oil increase in the international market.
He added that notwithstanding the attendant hike in the prices of refined petroleum products, the federal government could not return to the subsidy regime because government revenues have dropped by 60 per cent.
According to him, if the federal government should return to the subsidy regime, it could lead to a return to fuel queues.
Osinbajo stated that petrol subsidy had to be scrapped, because there was no allocation for it in the revised 2020 budget in view of the necessity to free funds for health, education and other social services.