The Federal Government has asked Nigerians to brace for an increment in the pump price of Premium Motor Spirit (PMS), better known as Petroleum, as it restated its determination to scrap current subsidy regime for the product.
The government said this has become necessary in light of the current economic situation in the country.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, disclosed yesterday while addressing journalists at the graduation and awards ceremony organised by the Offshore Technology Institute, University of Port Harcourt, River State.
While explaining why the government must end the subsidy regime for PMS, Sylva said the regime is only “benefiting certain businessmen in the country” and not the ordinary people.
The minister said, “It is very unfortunate that if (there is) an increment in fuel pump price, (it) would have an impact on the marketplace and we are not happy about that. The President especially does not want to do it, but the economic realities are staring us in the face.
“Can we continue to support the subsidy, which is not necessarily benefiting the ordinary person, but is benefiting certain individuals who are businessmen in the country? I don’t want to identify the people that are benefiting.
“Subsidy is not directly benefitting Nigerians; the biggest contact with Nigerians is kerosene consumption used by local persons for cooking; as for diesel, it is used to transport food items and so on. But these have been deregulated for a long time now.”
According to him, PMS, which he said is not the preferred fuel of the common man, continues to defy deregulation. He added that, because PMS proponents are the most vocal, they continue to kick against deregulation “but we are going to get there.”
Sylvia added, “Right now, we are still in discussion with stakeholders, so we have decided to go on with subsidy for some time, until we are able to conclude our discussions with the stakeholders and announce the policy direction.”
Sylva had earlier in February admonished Nigerians to be ready to bear the pains of increased petrol pump price even as crude oil price climbed above $60 per barrel.
He said there was no provision subsidy in the 2021 budget, Nigerian National Petroleum Corporation, NNPC, cannot continue to bear the cost of under-recovery.
The Minister said while government revenue has improved by the rise in crude oil price, it cannot be fretted away in subsidy payment.
He said: “Since we are optimizing everything, NNPC needs to also think about the optimization of product cost because as we all know oil prices are where they are today, $60.
“As desirable as this is, this has serious consequences as well on product prices. So we want to take the pleasure and we should as a country be ready to take the pain.
“Today the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy.
“So, somewhere down the line, I believe that the NNPC cannot continue to take this blow. There is no way because there is no provision for it.
“As a country, let us take the benefits of the higher crude oil prices and I hope we will also be ready to take a little pain on the side of higher product prices”
