Sunday, September 20, 2020

How the removal of the fuel subsidy will make Nigeria ₦ 1 trillion annually – Sylva

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Mr. Timipre Sylva, Minister of State for Petroleum Resources, says the Federal Government’s decision to completely eliminate subsidies on gasoline will bring the country one trillion pounds a year and create massive jobs.

Sylva, who said this on Thursday, while speaking to reporters in Abuja, said that starting in October, Nigerians “can now convert cars that use oil into gas, which will be cheaper.”

“It is time for Nigerians to face reality and do the right thing. What is deregulation going to do? It will free up a lot more money.

“At least from the beginning, it will save us up to a trillion and more each year.

“We have already assumed the budget provision for subsidies, which is around 500 billion naira in the budget.

“In addition, we have taken away the excess price of foreign exchange at that special rate that was given to NNPC, which also had a cost.

“So all the money that we used to defend the naira at that time to subsidize the dollar will now be released for development.

“I think this discussion on subsidies has been a controversial topic that has captured the imagination of this country for a long time,” said the minister.

According to him, successive administrations have tried to deregulate but sometimes, some administrations lacked political will and on other occasions, the moment was not good for it.

“And why did I say that the weather was not good for that? Does that imply that it is a good time for that now? The problem with deregulation is that people must first understand that the product we are talking about is a derivative of crude oil.

“It is refined from crude oil. Therefore, it has a direct relationship with the price of crude. If the price of crude oil rises, then it is expected to be reflected in the price of the derivative.

“So the best time to achieve this that we saw was the time when crude oil prices are low for Nigerians to benefit from those low prices,” he said.

The minister recalled that in March, when the Federal Government announced deregulation, prices were low and that advantage was transferred to the consumer.

“So we lowered the price of gasoline. The unfortunate thing is that when we lowered the price of gasoline, no one reacted in the market. The prices were the same.

“Nobody lowers their prices because the price of gasoline has dropped. Even the bus and taxi fares were the same. It didn’t drop when we lowered the gas pump price.

“We think that those people in the market; the drivers and owners of the transport would reduce its price. But nobody lowers their prices, “said the minister.

According to him, every time there is a kobo increase in the retail price of the product, it is seen that people will increase their prices three to four times.

Sylva said the Federal Government was planning an alternative fuel to give deregulation a human face.

“To give it (deregulation) a human face, we are introducing an alternative fuel. We are giving the car gas. Gas will now become a fuel for our cars. This program will be implemented in the next month.

“So if you go to a service station and you convert your car to double capacity or dual fuel, then you drive to a typical service station, you will find LPG gas, you will find CNG and LNG for sale.

“So if you look at the price of PMS versus the price of gas and you think gas is cheaper, which of course will be cheaper.

“Gas will be even cheaper than PMS as it is today. As you can see, we are also providing an alternative to ordinary Nigerians, ”said the minister.

YAYA

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