Buhari to Nigerians: ‘Low’ petrol price unsustainable, just compare prices with Ghana, Saudi, others

President Muhammadu Buhari says Nigeria cannot sustain its “low” pump prices of petrol amid shrinking revenue and poor foreign exchange earnings.

The president said this in his address on the occasion of Nigeria’s 60th independence anniversary on Thursday.

Mr Buhari said Nigeria suffered a significant drop in foreign exchange earnings and internal revenues due to 40 per cent drop in oil prices and steep drop in economic activities as a result of the Covid-19 pandemic.

These developments, he said, led to a 60 per cent drop in government revenue.

“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, 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.”

Pump Price Increase

In September, Nigerians started paying about 10 per cent more for petrol as the government’s deregulation policy kicked off.

Over the years, the Nigerian government has struggled to do away with fuel subsidies and allow private companies to import the product.

In March, the government announced that it would scrap subsidies on petrol and allow market forces to determine the retail price of the product.

Fuel subsidies have drained billions of dollars from the Nigerian treasury over the past years as the national oil company, NNPC, struggles to maintain supply as the sole importer of petrol.

The recent increase has been condemned by rights groups, thought leaders, and other Nigerians

.Many argued that such a move was insensitive, especially in the middle of a pandemic that has rendered many Nigerians jobless and wiped off millions from the pockets of small business owners.

But Mr Buhari on Thursday said even in the prevailing circumstances, “a responsible government must face realities and take tough decisions”.

Petroleum prices in Nigeria are to be adjusted, he said, and Nigeria now sells at about N161 per litre.

“A comparison with our neighbours will illustrate the point,” he argued.

“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.”

Economic Trajectory

Speaking on Nigeria’s economic trajectory, Mr Buhari blamed incessant military interventions and the civil war for the nation’s economic woes.

He said: “Upon attaining independence, Nigeria’s growth trajectory was anchored on policies and programmes that positively impacted on all sectors of the economy. However, this journey was cut short by the 30-months of civil war.

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“We came out of the civil war with a focus on reconstruction, rehabilitation and reconciliation that enabled the country to put in place world class development structures and a strengthened public service that well served the government. This positive trajectory continued with a return to democratic government which was truncated by another round of military rule.”