“Federal Government Never Promised To Keep Fuel Price Permanently Low” – Petroleum Minister Says

Posted by E.L.E.X on July 09 2020 under News

The recent increment in petrol pump price to over N140 has no doubt generated criticism from Nigerians in the last couple of days.

Timipre Sylva, the Minister of State for Petroleum Resources, while reacting to the criticisms stated that at no time did the federal government promised to keep the price of petrol permanently low.

According to Sylva, 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, adding that at that time, the government indicated that increase in crude oil prices would also reflect at the pumps.

He said:-

“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.”

He called on Nigerians to ignore the antics of unscrupulous middlemen who would want status quo ante to remain at the expense of the generality of Nigerians.

He added that in addition to attracting investments and creating jobs and opportunities, the deregulation policy would free up trillions of naira to develop infrastructure instead of enriching a few.

He said:-

“Deregulation means that the Government will no longer continue to be the main supplier of petroleum products. But will encourage private sector to take over the role of supplier of Petroleum Products.
“This means also that market forces will henceforth determine the prices at the pump. In line with global best practices, Government will continue to play its traditional role of regulation; to ensure that this strategic commodity is not priced arbitrarily by private sector suppliers; a regulatory function not unlike the role played by the Central Bank of Nigeria in the banking sector; ensuring that commercial banks do not charge arbitrary interest rates.
“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.”