The Minister of State for Petroleum Resources, Timipre
Sylva, has said the Federal Government did not at any time promise to keep the
pump price of Premium Motor Spirit (petrol) permanently low.
Sylva also said the government had concluded that it could
no longer bear the burden of petrol subsidy.
The minister said these in a statement published on Thursday
on the ministry’s Instagram page, with the title ‘Deregulation: The facts and
the reasons behind the policy’.
“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,” he said.
According to him, 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,” Sylva said.
He likened the regulatory function to the role played by the
Central Bank of Nigeria in the banking sector, “ensuring that commercial banks
do not charge arbitrary interest rates”.
The minister said, “Petroleum products are refined from
crude oil. Therefore, the price of crude (the feedstock) for the refining
process will affect the price of the refined product.
“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 was lowered. At that time, we
indicated that an increase in crude oil prices will also reflect at the pump.”
He said one of the reasons the country had been unable to
attract the level of investments desired into the refining sector had been the
burden of fuel subsidy.
Sylva said, “We need to free up that investment space so
that what happened in the banking sector, the 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.”
Click to signup for FREE news updates, latest information and hottest gists everyday
Advertise on NigerianEye.com to reach thousands of our daily users
No comments
Post a Comment
Kindly drop a comment below.
(Comments are moderated. Clean comments will be approved immediately)
Advert Enquires - Reach out to us at NigerianEye@gmail.com