Nigeria’s revenue dropped by 60% due to COVID-19 —Buhari
•Says N1.7trn on power subsidy no longer sustainable
PRESIDENT Muhammadu Buhari has said that COVID-19 has resulted in 60 per cent drop in Nigeria’s revenue this year, adding that this has affected all of government’s operations.
He also said in order to keep the electricity industry going, his administration had so far spent almost N1.7 trillion supplementing tariffs shortfalls, noting that at this point, there is no resource to continue this way.
He then warned of severe consequences a return of petrol subsidy and reduction in electricity tariff will cause the nation.
Speaking at the commencement of the first-year ministerial performance review retreat in Abuja on Monday, he assured that his administration is extremely mindful of the pains that higher prices mean and does not take the sacrifices Nigerians have to make for granted.
Represented by Vice President Yemi Osinbajo, the president 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 (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 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.
“There are several negative consequences if government should 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. 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 keep coming down.”
On the impact of COVID-19 on the nation’s revenue, Buhari said the country is facing a trying time because of poor revenue from crude oil, while foreign reserves have dropped drastically.
He added: “For the government, it has been a particularly trying time. As a result of the poor fortunes of the oil sector, our revenues and foreign exchange earnings have fallen drastically. Our revenues have fallen by almost 60 per cent.
“Yet we have had to sustain expenditures, especially on salaries and capital projects, in order to keep the economy going.”
He affirmed that it would be grossly irresponsible to borrrow to subsidise generation and distribution of electricity, which are both privatised.
The president expressed disappointment with the services of Distribution Companies (DisCos) in recent times, saying that with dwindling resources, spending N1.7 trillion as tariff subsidy is no longer sustainable.
He added that: “NERC, the industry regulator, therefore, approved that tariff adjustments had to be made, but 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 supply or the B, D and E customers must be maintained on lifeline tariffs, meaning that they will experience no increase. This is the largest group of customers.”
To address complaints about arbitrary estimated billing, the president said a mass metering programme is being undertaken to provide meters for over five million Nigerians, largely driven by preferred procurement from local manufacturers – creating thousands of jobs in the process.
Also, for most Nigerians not connected to electricity at all, the president said as part of the Economic Sustainability Plan, the country is providing solar home systems to five million Nigerian households in the next 12 months.
Also speaking at a media briefing on Monday, Minister of Information and Culture, Alhaji Lai Mohammed, said between 2006 and 2019, the government spent N10.414 trillion on petroleum subsidy, which translated to an average of N743.8 billion per annum.
Reeling out the figure from the Nigerian National Petroleum Corporation (NNPC) data, the minister said angry reactions to recent hike in electricity and petrol prices are unnecessary and totally mischievous.
He said since March when government decided to deregulate the downstream sector of the petroleum industry, prices of petrol had since reduced twice and Nigerians did not complain about it.
The minister said despite the increase in the petrol price, Nigerians still enjoy cheapest prices of petrol and electricity tariff in Africa.
The Peoples Democratic Party (PDP), however, said the attempt by President Buhari to justify the “wicked” hike in the pump price of pet- rol was provocative, confrontational and totally unacceptable to Nigerians.
In a statement issued by its national publicity secretary, Kola Ologbondiyan, in Abuja, the party also stated that the Buhari presidency is pushing Nigerians to the wall with its “arrogant display of insensitivity and total disregard for the demands by the citizens to effect an immediate downward review in the pump price of petrol.”
The PDP held that the defence of such a humongous hike, which it said had worsened the hardship of Nigerians, was in bad taste and should be rescinded immediately.
The PDP said it totally rejects this attempt to hinge the increase in fuel price on presumed removal of oil subsidy when government has allegedly failed to account
for the proceeds of oil sales in the last five years, “even in the face of confession by the Managing Director of the NNPC, Mele Kyari, in April this year, that the APC administration had been running an over-bloated and sleazy oil subsidy regime.
YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE
TOUGH POLICIES: IMF, World Bank Take Over Nigeria’s Economy •More Pains Ahead For Nigerians
ALTHOUGH this seems a difficult period for Nigerians, Sunday Tribune investigations have, however, revealed that it could actually be a signal to the beginning of more unbearable pains in the form of economic policies as the Federal Government continues to implement the stringent conditions of its international creditors…
What I See Around The Villa — Primate Ayodele
In this interview by KEHINDE OYETIMI, founder of Inri Evangelical Spiritual Church, Lagos, Primate Ayodele speaks on both global and local issues…
High Cost Of Fuel, Electricity Will Ruin Our Lives — Market Leaders, Business Owners Lament
CONDEMNATION of the hike in petroleum products and electricity went notches higher at the weekend as more Nigerians flayed the decision of the Federal Government to take such a decision not minding the fatal blow dealt the economy by the coronavirus pandemic…