President Muhammadu Buhari Monday in Abuja gave reasons his government cannot reverse the increase in the prices of petrol and electricity in the country, saying it was done in the long term economic interests of Nigerians.
Besides, he said the 2020 budget has no provision for petrol subsidy.
Buhari spoke at the First Year Ministerial Performance Review Retreat at the State House Conference Centre.
His speech was delivered by Vice President Yemi Osinbajo.
According to Buhari, the target of providing 11,000 megawatts by 2023 was realistic and realizable, and would provide a lifeline for many businesses and improve the living conditions of many Nigerians.
He assured Nigerians of the willingness and determination of the Federal Government to provide stable electricity to every home and industry, while considering the economic challenges before individuals, families and businesses, explaining that “implementation of a Willing buyer, Willing Seller Policy for the power sector has opened opportunities for increased delivery of electricity.’’
President Buhari noted that increase in price of electricity and deregulation of the petroleum sector were crucial decisions that were taken at the beginning of the year, preceding the COVID-19 pandemic.
He said continuous delay in implementation of the policy of the “Willing Buyer, Willing Seller’’ and deregulation of the petroleum would be detrimental to the economy, placing the burden of regular light cuts and fuel queues on Nigerians.
“Implementation of a Willing Buyer, Willing Seller Policy for the power sector, has opened up opportunities for increased delivery of electricity to homes and industries. We are also executing some critical projects through the Transmission, Rehabilitation and Expansion Programme, which will result in the transmission and distribution of a total of 11,000 Megawatts by 2023.
“On transportation, we are growing the stock and quality of our road, rail, air and water transport infrastructure. The Presidential Infrastructure Development Fund projects are also progressing very well. These include the 11.9 km Second Niger Bridge, 120 km Lagos-Ibadan Expressway, and 375 km Abuja – Kaduna – Zaria – Kano Expressway. At the same time, we are actively extending and upgrading our railway networks, as well as our airports which are being raised to international standard with the provision of necessary equipment, to guarantee world class safety standard.’’
The President said the COVID-19 pandemic led to severe downturn in the funds available to finance the nation’s budget.
“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 (PMS) such that the benefit of lower prices at that time was passed to consumers.
“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 would go up.
“There are several negative consequences if Government should even attempt to go back to 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% 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.
“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 simply have no choice.
“Nevertheless, I want to assure our compatriots that Government is extremely mindful of the pains that higher prices mean at this time, and we do not take the sacrifices that all Nigerians have to make for granted. We will continue to seek ways and means of cushioning pains especially for the most vulnerable in our midst. We will also remain alert to our responsibilities to ensure that marketers do not exploit citizens by raising pump price arbitrarily.
“This is the role that government must now play through the Petroleum Products Pricing Regulatory Agency (PPPRA). This explains why the 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 be keep coming down.’’
On electricity, the President added that the recent service based tariff adjustment by the Discos had also been a source of concern for the government.
“Let me say frankly that like many Nigerians I have been very unhappy about the quality of service given by the Discos, but there are many constraints including poor transmission capacity and distribution capacity. I have already signed off on the first phase of the Siemens project to address many of these issues.