March 08, (THEWILL)- The federal government has admitted to paying the excess cost of petrol consumption to prevent social unrest and ensure price stability in the overall interest of Nigerians.
Special Adviser to the President on Energy, Olu Verheijen, who disclosed this on Friday, during a ministerial press briefing in Abuja, however, insisted that subsidy has been removed on petrol.
President Bola Tinubu, in his inaugural speech as President, at Eagle Square, Abuja, on May 29, announced the effective end of the petrol subsidy regime.
Petrol currently sells between N600/litre and N700/litre depending on the area of purchase.
Amid the increase in the price of crude at the International market, together with the high exchange rate, oil marketers in Nigeria in their threat to further increase the pump price of petrol even as the marketers confirmed that the landing cost of the product has increased at the depot, had backpedalled on their action.
While THEWILL had earlier reported the reintroduction and indeed secret payment of subsidy on petrol, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), also claimed that the government had restored subsidy on petrol, despite the official government policy of ending the subsidy regime since May.
The International Monetary Fund has also alleged that the government still maintains subsidies on fuel pump prices.
Speaking on Friday, Verheijen said it is the prerogative of the government to maintain price stability. She argued that the developed countries including the United States do the same to prevent economic volatility.
She, therefore, said government intervention to stabilise prices does not remove the fact that subsidy has been removed.
“The question of subsidy, the subsidy was removed on May 29, 2023. However, the government has the prerogative whether the US, in the West and other Eastern countries, all governments have the prerogative to maintain price stability and prevent social unrest.
“So if prices are moving, they reserve the right to intervene. It started in the US during COVID. There were a lot of expansionist moves but also subsidies.
“All governments deserve that right. And so if for whatever reason the administration has reviewed that it is not the right time to have prices continue to fluctuate given the level of hardship in the country, given inflation, the government has the right to intervene intermittently.
“All governments do so but it does not take away the fact that the subsidy was removed.”
Speaking on the price of cooking gas, Verheijen said, “A significant portion of our gas is being imported. So we are price takers and not price setters.
“Because the president was very concerned about the cost of living, he approved the fast-tracking of fiscal incentives to enable more investments into the LPG space with the hope that if we achieve scale, we can bring down costs. And we can also incentivise the domestication of some of our LNG production. We started it, but unfortunately, foreign exchange and the market prices began to increase.
“We’re going to continue to work and look at more opportunities to improve supply and scale up and enable all LPG into the market at affordable prices. It’s a priority of this administration.”
In the latest executive order signed by the President, Verheijen stressed that the ambition of the administration is “to accelerate our economic growth and diversify the economy for the benefit of all Nigerians. This requires timely, credible, clear and consistent policy.”
While admitting that the administration is faced with a revenue crisis, she, however, said: “President Bola Tinubu is actively seeking ways to grow revenue and forex to stabilise our economy and currency. The Oil and Gas sector is critical to our ability to do so. Our current oil and gas production and investment levels fall significantly short of our potential.”
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