PMB explains reasons for adjustment to petroleum prices

President Muhammadu Buhari on Thursday gave more reasons why Nigeria had to adjust petroleum prices in his address on the occasion of the country’s 60th Independence Anniversary.

President Buhari said the country had suffered a significant drop in our foreign exchange earnings and internal revenues due to 40 per cent drop in oil prices while working to contain the spread of the COVID-19 pandemic.

The President said the government was faced with the task of saving lives and livelihoods in the face of drastically reduced resources.
He explained that Nigeria remained an oil producing country with lower price for its Premium Motor Spirit (PMS) popularly known as petrol.

He said: “Fellow Nigerians, in addition to public health challenges of working to contain the spread of the Coronavirus, we have suffered a significant drop in our foreign exchange earnings and internal revenues due to 40 per cent drop in oil prices and steep drop in economic activities, leading to a 60 per cent drop in government revenue.

“Our government is grappling with the dual challenge of saving lives and livelihoods in face of drastically reduced resources.

“In this regard, sustaining the level of petroleum prices is no longer possible. The government, since coming into office has recognized the economic argument for adjusting the price of petroleum. But the social argument about the knock-on effect of any adjustment weighed heavily with the government.

Accordingly, in the last three years, we have introduced unprecedented measures in support of the economy and to the weakest members of our society in the shape of Tradermoni, Farmermoni, School Feeding Programme, job creation efforts, and agricultural intervention programmes.

“No government in the past did what we are doing with such scarce resources. We have managed to keep things going in spite of the disproportionate spending on security. Those in the previous Governments from 1999 – 2015 who presided over the near destruction of the country have now the impudence to attempt to criticize our efforts.

“In the circumstances, a responsible government must face realities and take tough decisions.

“Petroleum prices in Nigeria are to be adjusted. We sell now at N161 per litre. A comparison with our neighbours will illustrate the point; Chad which is an oil producing country charges N362 per litre. Niger, also an oil producing country sells 1 litre at N346. In Ghana, another oil producing country, petroleum pump price is N326 per litre.

“Further afield, Egypt charges N211 per litre. Saudi Arabia charges N168 per litre. It makes no sense for oil to be cheaper in Nigeria than in Saudi Arabia.”

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