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Fuel price increase inevitable, says FG

Fg says deregulation saved the country N1 trillion in six months

The Federal Government has said the increase in pump price of petrol is inevitable even as it disclosed that N1trillion was saved from deregulation in six months.

Fuel price was on Wednesday increased from N148 to N161.56, the third of such increase in three months.

But speaking at a press briefing in Abuja on Thursday, the Minister of State for Petroleum Resources Timipre Sylva said the government started deregulation of oil sector to save the country from going bankrupt as a result of subsidy payment.

Petroleum price sold at #159.00 at Ile-Epo Oke-Odo filling station in Lagos. September 3, 2020. Photo by Benedict Uwalaka.

Sylva said the rich were benefiting from subsidy payment to the detriment of the poor hence the removal.

‘’We can’t afford to continue paying subsidy. We decided it was high to deregulate the sector to save huge subsidy payment benefitting only a few Nigerians. Government had stood back from importing petroleum products, we had left that open. Through that we have been able to save N1trillion since we started the deregulation in March’’, he said.

He stated that the N1trn saved from deregulation would be used on capital projects across the country next year.

He further said government would continue to protect the consumers by still policing the market so that marketers would not exploit them.

He said: “ It is not right to blame the government for the increase because we are no longer fixing price for the product.  The price is determined by the crude oil price at the international market. If price goes up, it will reflect locally and the pump price would go up. If the price comes down, the pump price would also come down.”

The Minister of State for Petroleum Resources, Chief Timipre Sylva
The Minister of State for Petroleum Resources, Chief Timipre Sylva

He however said a number of alternatives were being planned to cushion the effect of price increase on Nigerians.

According to him, the government would next month launch programme to introduce use of natural gas as alternative to petrol for vehicles.

The minister said the government would soon issue directive to all filling stations to upgrade and establish gas selling point for vehicles.

“Any marketer that fails to upgrade would not have its licence renewed,” he said.

He revealed that there will be conversation kits to convert vehicles from petrol to gas using ones.

On the oil production cut as agreed by members of Organisation of Oil Exporting Countries (OPEC), Sylva said Nigeria had reduced its daily crude oil production to 1.412million barrels per day , down from 2m barrels.


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