PRESIDENT Muhammadu Buhari has said that COVID-19 has resulted in 60 per cent drop in Nigeria’s revenue this year, adding that this has affected all of government’s operations.
He also said in order to keep the electricity industry going, his administration had so far spent almost N1.7 trillion supplementing tariffs shortfalls, noting that at this point, there is no resource to continue this way.
He then warned of severe consequences a return of petrol subsidy and reduction in electricity tariff will cause the nation.
Speaking at the commencement of the first-year ministerial performance review retreat in Abuja on Monday, he assured that his administration is extremely mindful of the pains that higher prices mean and does not take the sacrifices Nigerians have to make for granted.
Represented by Vice President Yemi Osinbajo, the president said: “The COVID-19 pandemic has led to a severe downturn in the funds available to finance our budget and has severely hampered our capacity.
“One of the steps we took at the beginning of the crisis in March when oil prices collapsed at the height of the global lockdown was the deregulation of the price of premium motor spirit (PMS) such that the benefit of lower prices at that time was passed to consumers. This was welcome by all and sundry.
“The effect of deregulation 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.
This is what has happened now. When global prices rose, it meant that the price of petrol locally will also go up.
“There are several negative consequences if government should attempt to go back to the business of fixing or subsidising PMS prices. First of all, it would mean a return to the costly subsidy regime. Today, we have 60 per cent 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 simply have no choice.
“Nevertheless, I want to assure our compatriots that government is extremely mindful of the pains that higher prices mean at this time and we do not take the sacrifices that all Nigerians have to make for granted.
“We will continue to seek ways and means of cushioning pains, especially for the most vulnerable in our midst. We will also remain alert to our responsibilities to ensure that marketers do not exploit citizens by raising pump price arbitrarily.
“This is the role that government must now play through the Petroleum Products Pricing Regulatory Agency (PPPRA). This explains why the PPPRA made the announcement a few days ago, setting the range of price 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.”
On the impact of COVID-19 on the nation’s revenue, Buhari said the country is facing a trying time because of poor revenue from crude oil, while foreign reserves have dropped drastically.
He added: “For the government, it has been a particularly trying time. As a result of the poor fortunes of the oil sector, our revenues and foreign exchange earnings have fallen drastically. Our revenues have fallen by almost 60 per cent.