Nigeria’s Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has claimed that the landing cost of Premium Motor Spirit (PMS) also known as petrol is now ₦35 higher than the pump price of ₦145 per litre.
Speaking as a guest on the ‘Good Morning Nigeria’ programme aired on Nigerian Television Authority (NTA) on Tuesday, Kachikwu said the rise in global crude oil prices after the 2016 hike in petrol was responsible for the re-introduction of subsidy.
While recalling the experience of 2016 when the Federal Government increased petrol price from ₦86.5 to ₦145 after months of severe scarcity, the m,inister said fuel subsidy was an emotive issue.
His words: “You have very positive argument that says ‘Why is this happening? Let’s get it out’ but 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. 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 ₦180 per litre and sale price is ₦145.
“Imagine if it was ₦90 something. We will literally be a bankrupt country. 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 ₦1.2 trillion-₦1.3 trillion.
“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.”