Buhari justifies increase in petrol price, electricity tariff

0
23
PRESIDENT MUHAMMADU BUHARI
PRESIDENT MUHAMMADU BUHARI

By Anayo Ezugwu

PRESIDENT Muhammadu Buhari has justified the increase in the petrol price and new electricity tariff. The President explained that the outbreak of the Coronavirus pandemic has compelled the federal government to make some far-reaching adjustments that may cause some initial pain, but which is necessary for long-term gains.

Speaking at the First Year Ministerial Performance Review Retreat in Abuja, Buhari said the timing of these two necessary adjustments was a mere coincidence. He said the deregulation of PMS prices happened quite some time ago, it was announced on March 18, 2020. According to him, the price moderation that took place at the beginning of this month was just part of the on-going monthly adjustments to global crude oil prices.

Similarly, Buhari stated that the review of service-based electricity tariffs was scheduled to start at the beginning of July, but was put on hold to enable further studies and proper arrangements to  be made. He said the government was not insensitive to the condition of the people and the very difficult economic situation. He promised that the government will not inflict hardship on the people.

“The COVID-19 pandemic, which has affected economies globally, has compelled us to make some far-reaching adjustments that may cause some initial pain, but which is necessary for long-term gains. As you all know, when oil prices collapsed at the height of the global lockdown, we deregulated the price of premium motor spirit (PMS) such that the benefit of lower prices was passed to consumers. This was welcome by all and sundry. The effect of regulation 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.

“There are several negative consequences if the Government should resume 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 have no choice.

“Nevertheless, I want to assure our compatriots that the government will remain alert to its responsibilities. The role of government now is to prevent marketers from raising prices arbitrarily or exploiting citizens. This was why the PPRA made the announcement a few days ago setting the range of prices 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 keep coming down.

“The other painful adjustment that we have to make in recent days is a review of the electricity tariff regime. If there is one thing that we have heard over and over again, it is that Nigerians want consistent and reliable power supply. So the power sector remains a critical priority for the administration. Protecting the poor and vulnerable, while ensuring improved service in the power sector, is also a major priority for government. And our policies, like the social investment programmes and other socio-economic schemes to benefit Nigerians, show that we remain focused on improving the welfare of the common man.

“The recent service-based tariff adjustment by the Discos has been a source of concern for many of us. Let me say frankly that like many Nigerians, I have been very unhappy about the quality of service given by the Discos. That is why we have directed that tariff adjustments be made only on the basis of guaranteed improvement in service. Under this new arrangement, only customers who are guaranteed a minimum of 12 hours of power and above can have their tariffs adjusted. Those who get less than 12 hours supply (Band D and E Customers) will not see any tariff adjustment. The poor and underprivileged, who were on R1 lifeline tariffs in the old structure will be maintained on lifeline tariffs, meaning that they will experience no increase,” he said.

Buhari also reassured Nigerians that the government has taken notice of the complaints about arbitrary estimated billing. Accordingly, he promised that a mass metering programme is being undertaken to provide meters for over five million Nigerians. He said the programme will be largely driven by preferred procurement from local manufacturers to create thousands of jobs in the process.

“NERC has also been instructed to strictly enforce the capping regulation which will ensure that unmetered customers are not charged beyond the metered customers in their neighbourhood. In addressing the power problems, we must not forget that most Nigerians are not even connected to electricity at all. So, as part of the Economic Sustainability Plan, we are providing Solar home systems to 5 million Nigerian households (impacting up to 25 million individual Nigerians) in the next 12 months.

“We have already begun the process of providing financing support through the CBN for manufacturers and retailers of Off Grid Solar Home Systems and Mini-Grids, who are to provide the systems. The Five million systems under the ESP’s Solar Power Strategy will produce 250,000 jobs and impact up to 25 million beneficiaries through the installation. This means that more Nigerians will have access to electricity via a reliable and sustainable solar system.”

– Sept. 9, 2020 @ 16:59 GMT |

Click Banner for Details