The Minister of State for Petroleum, Timipre Silva has said that government can’t continue with petrol subsidy because it is unrealistic.
Silva stated this while announcing that the Federal Government will no longer be part of subsidy for Petrol.
He revealed that market forces will henceforth determine the pump price of petrol.
“It has become expedient for the Ministry of Petroleum to explain misconceptions around the issue of Petroleum Products Deregulation.
“After a thorough examination of the economics of subsidising PMS for domestic consumption, the government concluded that it was unrealistic to continue with the burden of subsidising PMS to the tune of trillions of naira every year.
“More so, when the subsidy was benefiting in large part the rich rather than the poor and ordinary Nigerians.
“Deregulation means that the Government will no longer continue to be the main supplier of Petroleum Products, but will encourage the private sector to take over the role of supplying Petroleum Products,” he said.
He revealed that government will play its regulatory role to prevent pump price from being increased beyond proportion.
“A regulatory function not unlike the role played by the Central Bank of Nigeria in the banking sector; ensuring that commercial banks do not charge arbitrary interest rates.
“Petroleum Products are refined from Crude Oil. Therefore the price of Crude (the feedstock) for the refining process will affect the price of the refined product,” he added.
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