Angry reactions to fuel, electricity hikes mischievous ― FG

The Federal Government says angry reactions to the recent hike in prices of electricity and premium motor spirit (PMS) “were unnecessary and totally mischievous.”

Minister of Information and Culture, Alhaji Lai Mohammed, who made the declaration and a media briefing, on Monday, said since March when the government decided to deregulate the downstream sector of the petroleum industry, prices of PMS have been reduced twice and Nigerians did not complain about it.

He also stated that the Federal Government’s finances have been badly affected by low incomes from crude prices that it could not afford to continue with escalating subsidy cost of electricity hence the tariff hike.

Despite the hikes, he presented figures to show that Nigerians still enjoy cheapest PMS and electricity in Africa.

“The truth of the matter is that subsidising fuel is no longer feasible, especially under the prevailing economic conditions in the country.

“The government can no longer afford fuel subsidy, as revenues and foreign exchange earnings have fallen by almost 60%, due to the downturn in the fortunes of the oil sector.

“Yet, the government has had to sustain expenditures, especially on salaries and capital projects.”

In addition, he warned that sticking with subsidy regime on PMS has the potential of returning to a period of fuel queues when Nigerians queued for hours and days just to buy petrol, often at very high prices.

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“Of course, there is also no provision for fuel subsidy in the revised 2020 budget, because we just cannot afford it.”
Mohammed quoted a purported figure from Nigerian National Petroleum Corporation (NNPC) stating that the government spent N10.413 trillion on petroleum subsidy between 2006 and 2019, which translated to an average of N743.8 billion per annum.

On electricity, the Minister who was accompanied by Minister of State for Petroleum, Mr Timipriye Silva and Minister of Power, Mr Mamman Saleh explained that despite the privatisation of generation and distribution, the government had so far spent almost N1.7 trillion on supplementing tariffs shortfalls.

“Government does not have the resources to continue along this path. To borrow just to subsidize generation and distribution, which are both privatized, will be grossly irresponsible”, he declared.

He, however, explained that government was mindful of the pains associated with higher fuel prices at this time which were why it would continue to seek ways to cushion the pains, especially for the most vulnerable Nigerians including providing cheaper and more efficient fuel in form of autogas.

And to protect the large majority of Nigerians who cannot afford to pay cost-reflective tariffs “only customers with a guaranteed minimum of 12 hours of electricity can have their tariffs adjusted”, which “is the largest group of customers.”

“The opportunistic opposition and their allies are playing dirty politics with the issue of petrol pricing and electricity tariff.

“Please note that these naysayers did not complain when the price adjustment led to lower petrol prices on at least two occasions since March.

“Nigerians must therefore renounce those who have latched onto the issue of petrol pricing and electricity tariff review to throw the country into chaos”, he stated.

According to figures provided by the NNPC, the breakdown of the 14-year subsidy is as follows:
– In 2006 Subsidy was 257bn
– In 2007 Subsidy was 272bn
– In 2008 Subsidy was 631bn
– In 2009 469bn
– In 2010 667bn
– In 2011 2.105tn
– In 2012 1.355tn
– In 2013 1.316tn
– In 2014 1.217tn
– In 2015 654bn
– In 2016 Figure Not Available
– In 2017 Subsidy was 144.3bn
– In 2018 730.86bn
– And in 2019 Subsidy was 595bn

Below is a comparative analysis of petrol prices in the sub-regions (Naira equivalent per litre);
– Nigeria – 162 Naira per litre
– Ghana – 332 Naira per litre
– Benin – 359 Naira per litre
– Togo – 300 Naira per litre
– Niger – 346 Naira per litre
– Chad – 366 Naira per litre
– Cameroon – 449 Naira per litre
– Burkina Faso – 433 Naira per Litre
– Mali – 476 Naira per litre
– Liberia – 257 Naira per litre
– Sierra Leone – 281 Naira per litre
– Guinea – 363 Naira per litre
– Senegal – 549 Naira per litre

COST IN NAIRA PER KWH IN SOME AFRICAN COUNTRIES.
– Nigeria 49.75
– Senegal 71.17
– Guinea 41.36
– Sierra Leone 106.02
– Liberia 206.01
– Niger 59.28
– Mali 88.23
– Burkina Faso 85.09

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