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FG to Save more than N1trillion on Fuel Subsidy in 2020

…PPPRA and PEF to be merged if PIB is passed

-By Our Special Correspondent

The Federal Government has said more than a trillion Naira will be saved this year going by its decision to withdraw PMS subsidy.

This was revealed by the Hon. Minister of State for Petroleum Resources, Chief Timire Sylva during an emergency press conference at the ministry.

The minister said it has become necessary for the government to deregulate the fuel market considering the tight situation government found itself during the COVID-19 pandemic.

He recalled that for the first time in the history of the world, crude oil prices went below zero, thereby forcing some countries to pay money for the evacuation of the oil due to the product glut.

Chief Timipre Sylva, Honourable Minister of State for Petroleum Resources

Sylva added that due to low prices of oil which account for about 90 per cent of the country’s earnings, the government was forced to rebase its budget, thereby removing all the provision that was initially made for under-recovery from the budget.

The minister said in the pre-COVID period, the country’s oil export capacity had risen to about 2.6 mbpd, and that was the period when global oil prices were high.

According to him, the crisis led OPEC+ to issue out production quota that brings down the country’s daily production output to around 1.412 mbpd, this was done in order to resuscitate the falling prices which have now appreciated to $45 per barrel.

Chief Sylva said government was subsidizing fuel at two parts, “we were subsidizing at pump price, and at the forex market”

He said government is aware that the policy direction will come with pain, not only to the masses but even to those in government like him.

The minister, therefore, called on the people to endure a little more, saying the pain won’t last long as government is working on making available other alternatives to PMS which will be more affordable.

When asked on the need for government to provide some economic palliatives so as to cushion the impact of the present economic hardship experienced by the citizens, adding that already, government, through CBN and other ministries, has issued out lower interest loans to almost all the sectors of the economy as an intervention policy.

The minister said it is on record that no government in the history of the country has provided such number of palliatives to the citizens.

Chief Sylva said the present economic situation was caused by the wastes of resources of the previous administrations, recalling that the former Emir of Kano who was then the Governor of CBN predicted what is happing today in one of his speeches on petroleum subsidy administration in the country.

The minister also shedded light on what will be the function of PPPRA and PEF in the post-PIB period.

He said PPPRA and PEF will be merged as authourity that will be policing to make sure that fuel consumers are not shortchanged, and also to make sure fuel is bought at uniform prices in all locations of the country.