The minister of information and culture, Lai Mohammed, has said the increase in the price of fuel and electricity tariff will benefit ordinary Nigerians in the long run.
Mohammed stated this on Saturday during a meeting with online publishers in Lagos.
The minister, however, pleaded with Nigerians to be patient with the government over the increment in the prices of these essentials.
Mohammed explained that the revised 2020 budget does not accommodate fuel subsidy, as harsh economic conditions have impacted negatively on the country’s finances.
“I want to assure Nigerians, through you – gentlemen of the press – that the government is not insensitive to their plight. As a matter of fact, the full deregulation of the petroleum sector and the service-based electricity tariff adjustment will, in the long run, benefit the ordinary people,” he said.
“Ordinary citizens are not the beneficiaries of the subsidy on petroleum products that has lasted for years. Between 2006 and 2019, a total of N10.4 trillion was spent on fuel subsidy, most of which went to fat cats who either collected subsidy for products they didn’t import or diverted the products to neighbouring countries, where prices are much higher.
“Instead of subsidy, ordinary Nigerians were subjected to scarcity of petroleum products. They endured incessant long queues and paid higher to get the products, thus making the subsidy ineffectual.
“Apart from that, the truth is that the government can no longer afford the cost of subsidy, especially under the prevailing economic conditions.
“Revenues and foreign exchange earnings by the government have fallen by almost 60 percent, due to the downturn in the fortunes of the oil sector. And there is no provision for subsidy in the revised 2020 budget. So where will the subsidy money come from? Remember that despite the massive fall in revenues, the government still has to sustain expenditures, especially on salaries and capital projects.”
On the hike in electricity tariff, Mohammed said Nigerians will pay for the increment when there is an improvement in power distribution.
“To keep the industry going, the government has so far spent almost N1.7 trillion, especially by way of supplementing tariff shortfalls. The government does not have the resources to continue along this path. To borrow just to subsidise generation and distribution, which are both privatised, will be grossly irresponsible,” he added.