Buhari's govt didn’t promise to keep petrol prices low permanently, says minister/ Sylva

The Minister of State for Petroleum Resources, Timipre Sylva, has explained that the President Muhammadu Buhari-led government did not promise to permanently reduce petrol price as rumoured in some quarters.

Amid the coronavirus pandemic, the country has witnessed inconsistencies in the price of petrol.

In March, the pump price of petrol was fixed at N125 per litre but was reduced to N123.50 in April. 

The price was further reduced to N121.50 in June but in July, the Petroleum Product Pricing Regulatory Agency (PPPRA) increased the price again to N143.80.

The development has continued to generate heated controversies among Nigerians with many calling out the government for hiking the price of petrol when the masses are grappling with the biting impact of the coronavirus pandemic.

But in statement, Sylva said the price hike was not imposed on Nigerians but was necessitated by market forces.

The statement read: “After a thorough examination of the economics of subsidising PMS for domestic consumption, the FG concluded that it was unrealistic to continue with the burden of subsidizing PMS to the tune of trillions of naira every year. More so when this subsidy was benefiting in large part the rich rather than the poor and ordinary Nigerians.

“Deregulation means that the government will no longer continue to be the main supplier of petroleum products. But will encourage the private sector to take over the role of supplier of petroleum products.

“This means also that market forces will henceforth determine the prices at the pump. In line with global best practices, the government will continue to play its traditional role of regulation; to ensure that this strategic commodity is not priced arbitrarily by private sector suppliers; a regulatory function not unlike the role played by the Central Bank of Nigeria in the banking sector; ensuring that commercial banks do not charge arbitrary interest rates.

“There was no time government promised to reduce pump price and keep it permanently low.”

He continued: “Petroleum products are refined from crude oil. Therefore the price of crude (the feedstock) for the refining process will affect the price of the refined product.

“When crude oil prices were down, government, through its regulatory functions ensured that the benefits of lower crude oil prices were enjoyed by Nigerians by ensuring that PMS was lowered.

“At that time, we indicated that an increase in crude oil prices will also reflect at the pump.”