Onyebuchi Ezigbo in Abuja
The federal government has said its hands were tied over the decision to raise the pump price of petrol.
Speaking during a meeting with the national leadership of the ruling party, All Progressives Congress (APC), in Abuja, the Minister of Information, Culture and Tourism, Alhaji Lai Mohammed, said contrary to misrepresentations that fuel subsidy had been removed, what the government did was to liberalise the downstream sector of the oil industry.
Mohammed who was accompanied by the Secretary to the Government of the Federation (SGF), Babachir Lawal Minister of Labour and Productivity, Senator Chris Ngige, and Malam Adamu Adamu came to brief the party leaders about the rationale for the downstream policy on behalf of President Muhammad Buhari.
The ministers who took their turns to explain the position of government, noted that the decision to raise fuel price was made in order remove the heavy burden being placed on the dwindling foreign exchange earning.
“We do not have other option because the regime before now was based on a process where some licensed oil marketers would go to the Central Bank of Nigeria (CBN)and open a lot of credit.
“When a lot of credit is opened, they bring in the fuel but unfortunately the price of crude oil which accounted for over 70 per cent of our foreign exchange crashed from an all-high level of 100 dollars to under 30 dollars, As a matter of fact, for some parts of this year we sold crude for 28 dollars,” he said..
Mohammed explained that federal government paid over one trillion naira in subsidy in 2015 alone, adding that the N1trillion in subsidy amounted to 6 of the entire national budget.
“ So we agreed that we are not going to put subsidy, so what we did was not removing subsidy but actually liberalization but we had to do it because if the country is to survive we do not have other option.
“It’s just like somebody who had been earning N100,000 a month suddenly his salary is reduced to N30,000 he will need to make some very painful adjustments, so the truth of the matter is that we have to do this because there is no availability of foreign exchange. We don’t have sufficient foreign exchange to open letter of credit for anybody who wants to bring in fuel.
“Last month I was informed that the total amount of foreign exchange available to Nigeria was 550 million dollars and NNPC needed 500 million dollars out of it so you can see why it’s not working.
While addressing the gathering, SGF said that the government delegation was at the party secretariat at the instance President Buhari to explain recent policy decisions.
“You will remember that in ten days time the APC government as led by President Muhammadu Buhari will be One year in office. In these 12 months quite a number of key decisions have been taken.
Ngige said the issue of fuel subsidy was laid to rest when house resolution stopped it in the seventh senate.
“From 1999 till now there was a previous government that didn’t save for the rainy day, they didn’t.This means that if you were eating three times a day you eat two now. When I was a child, we eat rice on Sundays. Don’t let them deceive you there’s no subsidy removal. Capital expenditure will create jobs though not white collar jobs, that will be few,” he said.