President Muhammadu Buhari, yesterday, told traumatized Nigerians to gird their loins as the recent hike in the pump price of fuel was just the precursor of higher prices.
Speaking at the First Year Ministerial Performance Review Retreat at State House Conference Centre, Abuja, Buhari informed Nigerians to expect a further increase in the pump price of the product soon as the price of crude oil in the international market recovers.
“The COVID-19 pandemic, which has affected economies globally, has compelled us to make some far-reaching adjustments that may cause some initial pain, but which is necessary for long-term gains.
“As you all know, when oil prices collapsed at the height of the global lock-down, we deregulated the price of premium motor spirit (PMS), such that the benefit of lower prices was passed to consumers.
“This was welcome by all and sundry. The effect of regulation 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.”
“There are several negative consequences if the government should resume the business of fixing or subsidizing PMS prices. First of all, it would mean a return to the costly subsidy regime.
“Today we have 60 per cent less revenue, 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.
“Nigerians no longer have to endure long queues just to buy petrol, often at highly inflated prices. Also, as I hinted earlier, there is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it, if reasonable provisions must be made for health, education and other social services. We now have no choice.
“Nevertheless, I want to assure our compatriots that government will remain alert to its responsibilities. The role of government now is to prevent marketers from raising prices arbitrarily or exploiting citizens.
“This was why the Petroleum Product Pricing Regulatory Agency, PPPRA, made the announcement a few days ago, setting the range of price that must not be exceeded by marketers.
“The advantage we now have is that anyone can bring in petroleum products and compete with marketers, that way the price of petrol will keep coming down,” said Buhari who was represented by the vice president, Prof. Yemi Osinbajo.
The president also justified the recent increase in electricity tariff.
However, he said he was unhappy with the quality of service provided by the distribution companies (DisCos) but had directed that the tariff adjustments be made only on the basis of guaranteed improvement in service delivery.
“The other painful adjustment that we have had to make in recent days is a review of the electricity tariff regime.
“If there is one thing we have heard over and over again, it is that Nigerians want consistent and reliable power supply. So the power sector remains a critical priority for the administration.
“Protecting the poor and vulnerable, while ensuring improved service in the power sector, is also a major priority for the government. And our policies, like the social investment programmes and other socio-economic schemes to benefit Nigerians, show that we remain focused on improving the welfare of the common man.
“The recent service-based tariff adjustment by the DISCOs has been a source of concern for many of us. Let me say frankly that like many Nigerians, I have been very unhappy about the quality of service given by the DISCOs.
“That is why we have directed that tariff adjustments be made only on the basis of guaranteed improvement in service. Under this new arrangement, only customers who are guaranteed a minimum of 12 hours of power and above can have their tariffs adjusted.
“Those who get less than 12 hours of supply (B and D and E Customers) will not see any tariff adjustment. The poor and underprivileged who were on R1 lifeline tariffs in the old structure will be maintained on lifeline tariffs, meaning that they will experience no increase.
“Government has also taken notice of the complaints about arbitrary estimated billing. Accordingly, a mass metering programme is being undertaken to provide metres for over five million Nigerians, largely driven by preferred procurement from local manufacturers, creating thousands of jobs in the process.
“NERC has also been instructed to strictly enforce the capping regulation which will ensure that unmetered customers are not charged beyond the metered customers in their neighbourhood.
“In addressing the power problems, we must not forget that most Nigerians are not even connected to electricity at all. So, as part of the Economic Sustainability Plan, we are providing solar home systems to five million Nigerian households (impacting up to 25 million individual Nigerians) in the next 12 months,” he added.
He contended that the tariff adjustment “is not only about the increase, which will only affect the top electricity consumers but establishing a system which will definitely lead to improved service for all at a fair and reasonable price.”
On the timing of the increases, the president said: “There has been some concern expressed about the timing of these two necessary adjustments. It is important to stress that it is a mere coincidence in the sense that the deregulation of PMS prices happened quite some time ago.
“It was announced on March 18, 2020, and the price moderation that took place at the beginning of this month was just part of the on-going monthly adjustments to global crude oil prices.
“Similarly, the review of service-based electricity tariffs was scheduled to start at the beginning of July but was put on hold to enable further studies and proper arrangements to be made.
“This government is not insensitive to the condition of our people and the very difficult economic situation and we will not inflict hardship on our people,” he said.
