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President Muhammadu Buhari has said there is no provision for fuel subsidy in the revised 2020 budget.
He said this is simply because the federal government cannot afford it, if reasonable provisions must be made for health, education and other social services.
Buhari made this known in his address at the first year ministerial performance review retreat at the State House conference centre in Abuja.
He said the Coronavirus disease (COVID-19) pandemic has led to a severe downturn in the funds available to finance the nation’s budget and that it has severely hampered capacity too.
“One of the steps we took at the beginning of the crisis in March when oil prices collapsed at the height of the global lockdown, was the deregulation of the price of premium motor spirit (PMS) such that the benefit of lower prices at that time was passed to consumers. This was welcome by all and sundry.
“The effect of deregulation though is that PMS prices will change with changes in global oil prices. This means quite regrettably that as oil prices recover we would see some increases in PMS prices. This is what has happened now. When global prices rose, it meant that the price of petrol locally will also go up.
“There are several negative consequences if Government should even attempt to go back to the business of fixing or subsidizing PMS prices.
“First of all, it would mean a return to the costly subsidy regime. Today we have 60% less revenues, we just cannot afford the cost.
“The second danger is the potential return of fuel queues – which has, thankfully, become a thing of the past under this administration.
“Nigerians no longer have to endure long queues just to buy petrol, often at highly inflated prices.
“Also, as I hinted earlier, there is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it, if reasonable provisions must be made for health, education and other social services. We now simply have no choice,” Buhari said.
The President, nevertheless, assured Nigerians that the government is extremely mindful of the pains that higher prices mean at this time.
“We do not take the sacrifices that all Nigerians have to make for granted. We will continue to seek ways and means of cushioning pains especially for the most vulnerable in our midst.
“We will also remain alert to our responsibilities to ensure that marketers do not exploit citizens by raising pump price arbitrarily.
“This is the role that government must now play through the PPRA. This explains why the PPRA made the announcement a few days ago setting the range of price that must not be exceeded by marketers.
“The advantage we now have is that anyone can bring in petroleum products and compete with marketers, that way the price of petrol will be keep coming down,” Buhari said.