Minister Hints On Inevitability Of Higher Petrol Price, Says FG Can’t Afford Subsidy 

Questions on the lips of most Nigerians are why subsidy payments by the Federal government have been shrouded in secrecy, when trillions of naira has allegedly been expended on it; whose interests are the payments made when Nigerians are still paying higher even with the said payments, why has government not been able to properly monitor our borders and when will government come clean on the issue of deregulation of the down stream sector?
In the midst of this confusion, Zainab Ahmed, minister  of finance, Budget and National Planning has said that Petrol price in Nigeria will go higher from its present N165 if the price of crude keeps going up.

Ahmed spoke on Monday during her contribution in an interaction arranged by the Presidency Media team and State House reporters and monitored by PM news platform.According to the Minister the Federal Government will allow the prices of petroleum products to be determined by the market forces in line with the deregulation of the oil sector.

“We simply cannot afford the subsidy, we don’t have the money to pay for subsidy”, she said.
“We do recognise that there will be some increased hardships on a segment of the society. But we are looking at how to address that,’’ she added.

In another report published by Reuters, Ahmed called the rising price of crude a “double-edged sword,” as the Federal Government seeks a deal with Organised Labour over fuel prices.

She said the central government forecasts an optimistic outlook on the rising crude prices.

But simultaneously, it must deal with the “tussle” with Labour over subsidies and rising local prices of fuel.

According to her, the rising oil price is a double-edged sword for Nigeria.
While it boosts revenue, it creates fuel price headache at the same time.

Oil prices are averaging around $64 per barrel, above the $40 per barrel projected in the N13.6 trillion ($35.74 billion) budget document.

Early in March, the Petroleum Products Pricing Regulatory Agency (PPPRA) created national uproar, when it released the price template for petrol for the month.

The template indicated that the retail price should go to N212 per litre, from N162-N165.

Labour unions vowed to resist the increase.

Government halted the increase, as it apparently shouldered the subsidy burden, calculated at over N103 billion for the month.

For how long will government be able to put the lid on price increase as crude prices go up and exchange rate worsens?