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Hike Price Of Petrol: We Cannot Afford Subsidy Of Petrol Price Anymore-FG

Published

4 years ago

September 7, 2020

FG has declared that the government can no longer continue with the subsidized policy of the Petrol price.

News Rain gathered that the hikes in the price of Petrol pump price and electricity tariff got another dimension on Monday, as Federal Government through the Honorable Minister for Information and Culture, declared that the government can no longer continue with the subsidized policy of the Petrol price.

Federal Government said it has spent nothing less than N10.413 Trillion between 2006 and 2019 on fuel subsidy and that is what led to the decision of jettison policy.

FG On Subsidy Of Petrol Price

In a press briefing that was held in Abuja which was organized to the effect by Alhaji Lai Mohammed, the Honorable Minister of Information and Culture noted that amount represents an average of 743.8 billion Naira per annum.

He said in spite of the recent increase in the price of fuel to 162 Naira per liter, petrol prices in Nigeria remain the lowest in the West/Central African sub-regions.

The Minister said the government can no longer afford to subsidize petrol prices, with the current 60% fewer revenues of the federal government.

“The cost of fuel subsidy is too high and unsustainable. From 2006 to 2019, fuel subsidy gulped 10.413 Trillion Naira”.

While speaking on the hike of electricity, Mohammed said the government has so far spent almost N1.7 trillion on supplementing tariffs shortfalls.

“The Federal Government is not unmindful of the pains associated with higher fuel prices at this time. That is why we will continue to seek ways to cushion the pains, especially for the most vulnerable Nigerians” he said.

Mohammed said that according to figures provided by the NNPC, the breakdown of the 14-year subsidy indicate that Nigeria spent 257bn in 2006, 272bn in 2007, 631bn in 2008,

469bn in 2009, 667bn in 2010, 2.105tn in 2011, 1.355tn, in 2012, 1.316tn, in 2013, 1.217tn, in 2014, 654bn in 2015, 144.3bn in 2017, 730.86bn in 2018, and 595bn, in 2019, adding that the amount paid in 2016 is not available.

To keep the industry going, the government has so far spent almost 1.7 trillion Naira, especially by way of supplementing tariffs shortfalls. The government does not have the resources to continue along this path. To borrow just to subsidize generation and distribution, which are both privatized, will be grossly irresponsible”.

“Another issue we want to address here today is the recent service-based electricity tariff adjustment by the Distribution Companies, DISCOS. The truth of the matter is that due to the problems with the largely-privatized electricity industry, the government has been

supporting the industry”. Lai Mohammed stated.