Sylva: Buhari didn’t promise to keep price low
The Federal Government, yesterday, told millions of Nigerians that they will henceforth bear the burden of higher prices of Premium Motor Spirit (PMS) otherwise known as petrol.
Minister of State for Petroleum Resources, Chief Timipre Sylva, who declared this in a statement, declared that at no time did the President Muhammadu Buhari-led Federal Government promise to keep the pump price of the product permanently low.
The government had, through the Petroleum Products Pricing Regulatory Agency (PPPRA), started issuance of monthly price band advisory for petrol marketers.
With a declaration by the minister, what this means is that as the prices of crude oil surge at the international market, Nigerians will pay more for petrol.
The government, Sylva declared in the statement entitled; ‘Deregulation: The facts and the reasons behind the policy,’ had concluded that it could no longer bear the burden of petrol subsidy.
“After a thorough examination of the economics of subsidising PMS for domestic consumption, the Federal Government concluded that it was unrealistic to continue with the burden of subsidising 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 supplying the 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,” the minister said.
Sylva noted that 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 price was lowered.
He noted that government at that time indicated that increase in crude oil prices would also reflect at the pump.
“This is a necessary action taken by a responsible government in the overall interest of Nigerians.
“Indeed, one of the reasons we have been unable to attract the level of investments we desire into the refining sector has been the burden of fuel subsidy.
“We need to free up that investment space so that what happened in the banking sector, aviation sector and other sectors can happen in the midstream and downstream oil sector.
“We can no longer avoid the inevitable and expect the impossible to continue. There was no time government promised to reduce pump price and keep it permanently low.
“Let us, therefore, ignore the antics of unscrupulous middlemen who would want status quo ante to remain at the expense of the generality of Nigerians,” he added.
The minister noted that in addition to attracting investments and creating jobs and opportunities, the policy direction would free up trillions of naira to develop infrastructure instead of enriching a few.
He said that government was very mindful of the likely impact higher PMS prices would have on Nigerians.
“To alleviate this, we are working very hard to roll out the auto-gas scheme, which will provide Nigerians with alternative sources of fuel and at a lower cost,” he said.
He likened the regulatory function to the role played by the Central Bank of Nigeria (CBN) in the banking sector, “ensuring that commercial banks do not charge arbitrary interest rates.”
This has been the prayers of petroleum products marketers who demanded that the government should terminate interventions/subsidizing the price of petrol.
They have spoken at different fora against subsidy and have demanded that the government allow market fundamentals to determine the price.