The landing cost of Premium Motor Spirit , also known as petrol , is N 35 higher than the pump price of N 145 per litre , the Minister of State for Petroleum Resources , Dr Ibe Kachikwu , said on Tuesday . Kachikwu said the rise in global crude oil prices after the 2016
The landing cost of Premium Motor Spirit , also known as petrol , is N 35 higher than the pump price of N 145 per litre , the Minister of State for Petroleum Resources , Dr Ibe Kachikwu , said on Tuesday .
Kachikwu said the rise in global crude oil prices after the 2016 hike in petrol price brought back subsidy .
Recalling the experience of 2016 , when the government increased petrol price from N 86 . 5 to N 145 after months of severe scarcity , he described fuel subsidy as an emotive issue.
“ You have very positive argument that says , ‘ Why is this happening ; let ’ s get it out . ’ Once you do it, the streets get flooded by protesters . You have five or six or 10 days of no activity in the country . So , any attempt to remove the subsidy must be very well-managed, ” the minister said on the NTA Good Morning Nigeria programme , monitored by our correspondent .
He noted that in 2016 , the government wrote to the Nigeria Labour Congress and all the trade unions , adding that meetings were held with the security apparatus.
Kachikwu said, “Even when there was a consensus on how we were going to do it , we still had an issue at the very tail end of the moment ; NUPENG and PENGASSAN supported but , of course , the other members of the trade unions pulled out .
“ Eventually, thankfully, Nigerians saw through what we were trying to do and let it happen . And thank God that happened at the time because when you look at the gap today , the landing cost is about N 180 per litre and sale price is N 145 . Imagine if it ( pump price ) was N 90 – something; we will literally be a bankrupt country . ”
The minister added , “The point I am making is that anything you are going to do on subsidy requires a very efficient management of information – getting everybody who are stakeholders to tie into it .
“ Should we deal with the removal of subsidy ? I was gung – ho when I assumed this position that there was no way I was going to tolerate a subsidy regime at the time in 2015 of about N 1 . 2tn – N 1 . 3 tn . There was just no way; we didn ’ t have the capacity to continue to pay . ”
“ So , I convinced the President that this needed to happen ; thankfully, he listened , he agreed and we did . Now , we then had over – recovery period for quite a while and then we went into this upswing in prices that has now taken us again into under – recovery . ”
The minister noted that the government had not paid marketers all the outstanding subsidy arrears.
He said , “ I think , first and foremost , we need to find a way of fixing refineries quickly , whether it is government – funded or whatever – my preference is always private sector funding.
“ I think the labour union has never really said they would not be supportive of an attempt to take away this subsidy element; the union has always said, ‘ If you are doing it, show me what you [ will] do with those new receipts of income . Two , what do you do with the refineries ?’ Therefore, we need to address those to even get their buy – in .