President Muhammadu Buhari has told Nigerians to expect further increase in the price of petrol.
He said that Nigerians should expect to pay more as soon as the price of crude oil in the international market recovers.
Speaking yesterday, the President also defended the latest increase in electricity tariff, which has raised so much dust in the polity.
The President mentioned this at the First Year Ministerial Performance Review Retreat at State House Conference Centre, Abuja.
He said, “The COVID-19 pandemic, which has affected economies globally, has compelled us to make some far-reaching adjustments that may cause some initial pain, but which is necessary for long-term gains.
“As you all know, when oil prices collapsed at the height of the global lock-down, we deregulated the price of premium motor spirit, PMS, such that the benefit of lower prices was passed to consumers.
He also justified the latest increase in electricity tariff, which has raised so much dust in the polity.
“This was welcome by all and sundry. The effect of regulation though is that PMS prices will change with changes in global oil prices. This means, quite regrettably, that as oil prices recover, we would see some increases in PMS prices.”
Continuing, President Buhari who was represented by Vice-President Yemi Osinbajo, said: “There are several negative consequences, if government should resume the business of fixing or subsidizing PMS prices. First of all, it would mean a return to the costly subsidy regime.
“Today we have 60% less revenue, we just cannot afford the cost. The second danger is the potential return of fuel queues – which has, thankfully, become a thing of the past under this administration.
“Nigerians no longer have to endure long queues just to buy petrol, often at highly-inflated prices. Also, as I hinted earlier, there is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it, if reasonable provisions must be made for health, education and other social services. We now have no choice.
“Nevertheless, I want to assure our compatriots that government will remain alert to its responsibilities. The role of government now is to prevent marketers from raising prices arbitrarily or exploiting citizens.
“This was why the Petroleum Product Pricing Regulatory Agency, PPPRA, made the announcement a few days ago, setting the range of price that must not be exceeded by marketers.
“The advantage we now have is that anyone can bring in petroleum products and compete with marketers, that way the price of petrol will keep coming down.”
‘Why we hiked electricity tariff’
Justifying the increase in electricity tariff, Buhari said: “The other painful adjustment that we have had to make in recent days is a review of the electricity tariff regime.
“If there is one thing we have heard over and over again, it is that Nigerians want consistent and reliable power supply. So the power sector remains a critical priority for the administration.
“Protecting the poor and vulnerable, while ensuring improved service in the power sector, is also a major priority for government. And our policies, like the social investment programmes and other socio-economic schemes to benefit Nigerians, show that we remain focused on improving the welfare of the common man.
“The recent service-based tariff adjustment by the DISCOs has been a source of concern for many of us. Let me say frankly that like many Nigerians, I have been very unhappy about the quality of service given by the DISCOs.
“That is why we have directed that tariff adjustments be made only on the basis of guaranteed improvement in service. Under this new arrangement, only customers who are guaranteed a minimum of 12 hours of power and above can have their tariffs adjusted.
“Those who get less than 12 hours of supply (B and D and E Customers) will not see any tariff adjustment. The poor and under-privileged who were on R1 lifeline tariffs in the old structure will be maintained on lifeline tariffs, meaning that they will experience no increase.
“Government has also taken notice of the complaints about arbitrary estimated billing. Accordingly, a mass metering programme is being undertaken to provide metres for over five million Nigerians, largely driven by preferred procurement from local manufacturers, creating thousands of jobs in the process.
“NERC has also been instructed to strictly enforce the capping regulation which will ensure that unmetred customers are not charged beyond the metred customers in their neighbourhood
“In addressing the power problems, we must not forget that most Nigerians are not even connected to electricity at all. So, as part of the Economic Sustainability Plan, we are providing solar home systems to five million Nigerian households (impacting up to 25 million individual Nigerians) in the next 12 months.
Solar power to complement supply
“We have already begun the process of providing financing support through the CBN for manufacturers and retailers of Off-Grid Solar Home Systems and Mini-Grids who are to provide the systems.
“The five million systems under the ESP’s Solar Power Strategy, will produce 250,000 jobs and impact up to 25 million beneficiaries through the installation This means that more Nigerians will have access to electricity via a reliable and sustainable solar system.
“The support to Solar Home System manufacturers and the bulk procurement of local metres will create over 300,000 local jobs while ensuring that we set Nigeria on a path to full electrification.
“The tariff review is not about the increase, which will only affect the top electricity consumers but establishing a system which will definitely lead to improved service for all at a fair and reasonable price.
“There have been some concern expressed about the timing of these two necessary adjustments. It is important to stress that it is a mere coincidence in the sense that the deregulation of PMS prices happened quite some time ago.
“It was announced on March 18, 2020, and the price moderation that took place at the beginning of this month was just part of the on-going monthly adjustments to global crude oil prices.
“Similarly, the review of service-based electricity tariffs was scheduled to start at the beginning of July but was put on hold to enable further studies and proper arrangements to be made.
“This government is not insensitive to the condition of our people and the very difficult economic situation and we will not inflict hardship on our people. Ministers and senior officials must accordingly ensure vigorous and prompt implementation of the ESP programmes to give succour to Nigerians at this difficult time.
“In this regard, the Central Bank of Nigeria, CBN, has created credit facilities (of up to N100 billion) for healthcare (N100 billion) and manufacturing (N1 trillion) sectors.
“From January 2020 to date, over N191.87billion have already been disbursed for 76 real sectors projects under the N1Trillion Real Sector Scheme, while 34 healthcare projects have been funded to the tune of N37.159billion under the Healthcare Sector Intervention Facility.
“The facilities are meant to address some of the infrastructural gap in the healthcare and manufacturing sectors as a fall out of COVID-19 pandemic and to facilitate the attainment of the Governors 5-year strategic plan.’’
‘Mankind struggling with COVID-19’
Speaking on the essence of the retreat, the President said: “We are meeting at a time that mankind is struggling to overcome the economic and social crisis caused by the COVID-19 pandemic, which has disrupted life as we knew it. The consequences of the pandemic will no doubt influence our deliberations at this gathering, especially as we will have to adjust our policy approaches and methods of working going forward.
“I stressed at last year’s retreat that the Nigerian people expect dedication and commitment by all of us in implementing policies, programmes and projects to improve the quality of their lives and set Nigeria on the path of prosperity.
“I also reiterated the resolve of this administration to set the stage for lifting 100 million Nigerians out of poverty in the next 10 years. Even today, these remain our overriding objectives.