Following the increase in prices of petroleum products and the hikes in electricity tariffs, president Muhammadu Buhari has blamed the increase on Covid-19.
During the ministerial performance review retreat on Monday, September 7, 2020, vice president of Nigeria, Yemi Osinbajo who represented the president explained that the Covid-19 pandemic is what has led to the increase in the prices of various commodities.
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He said; “The COVID-19 pandemic has led to a severe downturn in the funds available to finance our budget and has severely hampered our capacity. One of the steps we took at the beginning of the crisis in March when oil prices collapsed at the height of the global lockdown was the deregulation of the price of Premium Motor Spirit such that the benefit of lower prices at that time was passed to consumers.”
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“This was welcome by all and sundry. The effect of deregulation 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. This is what has happened now. When global prices rose, it meant that the price of petrol locally will also go up.”
He explained further that, government cannot go back to the business of fixing or subsidizing PMS prices adding that it will have a negative consequences on the nation’s economy.
He continued: “There are several negative consequences if government should even attempt to go back to the business of fixing or subsidising PMS prices. First of all, it would mean a return to the costly subsidy regime. Today we have 60 per cent less revenues, 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.”
“We do not have the resources at this point to continue in this way and it will be grossly irresponsible to borrrow to subsidise a generation and distribution which are both privatised. But we also have a duty to ensure that the large majority of those who cannot afford to pay cost reflective tariffs are protected from increases. NERC, the industry regulator, therefore approved that tariff adjustments had to be made but only on the basis of guaranteed improvement in service.”
Source: AfricaCelebrities.Com
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